Terms Flashcards
Why is accounting necessary for people and/or businesses?
Accounting communicates financial information to enable successful financial decisions to be made.
Name 3 things Accounting assists with?
- Financial decisions
- Discharges certain accountability
- Evaluates financial performance
What are Sole Traders?
An individual and only owner of a business
Is a sole trader a legal entity? Explain.
A sole trader isn’t a legal entity because (by law) their is no discrimination between the person and their business.
Explain a business enterprise as an entity.
A business enterprise has an existence seperate from the financial affairs of the owner. They are considered 2 different records.
A Sole trader and the business are considered…
One entity and both affect each other.
Is the sole trader responsible for all dept?
A sole trader is entitled to all the profits of a business and are the only individual responsible to all actions of debt.
If the business of a sole trader cannot pay debts, who is sued?
The sole trader is sued and held responsible, not the business.
What are assets?
Assets are items that are owned by a business.
Define Limited Liability.
The shareholders of a company are responsible for debts only to the extent of their share price.
Owners equity are…
Investments the owner has made in a business particularly capital and drawings
What is CRS?
Cash registry summary is sales that go directly through the cash register.
