The accounting environment Flashcards
sole trader
Complete control
keeps all profits and losses
unlimited liability
accounts do not have to be published
Partnerships
Multiple people
share profits and losses according to deed of partnership
limited or unlimited partners
Public sector
government run
doesn’t aim to make a profit
private sector
limited liability
privately run
needs to be checked by an auditor
stakeholders
anyone involved in the business
suppliers
owners
employees
shareholders
anyones who owns part of the business or owns shares in a business
consistency
keeping the same accounting concepts throughout the accounting year
prudence
record expenses before they occur while record income only when it is received
accruals
record expenses and income the year that they occur not when you pay them
materiality
if an asset or expense is too low u can avoid some accounting concepts
money measurement concept
only record things that can be measured with money
business entity
the business is separate from the owner
pros of technology in accounting
faster than humans
more accurate than humans
cheaper than humans
cons of technology in accounting
could be hacked or malfunction
need to train employees on how to use them increasing training costs
could be fatal if system crashes
safety features for using tech in accounting
limited access
anti-malware software
physical firewall
