Trasactions Flashcards
What is an example of a transaction?
The sale of goods to customers
Transactions can include various exchanges of goods and services.
What is the accounting process?
The process of recording financial transactions to provide useful information to stakeholders
This includes tracking income, expenses, and profitability.
Who are internal stakeholders?
People within the business (e.g., managers, employees, owners)
Internal stakeholders are directly involved in the operations of the business.
Who are external stakeholders?
People outside the business (e.g., bank managers, suppliers, wholesalers)
External stakeholders have an interest in the business’s performance but are not directly involved.
What should business management know?
- That enough money flows into the business
- That money spent by the business is not wasted
- Whether the business is profitable or not
Understanding these aspects is crucial for effective management.
Fill in the blank: The return of goods by _______
customers
Fill in the blank: The payment of money to _______ and wholesalers
suppliers
True or False: The purpose of accounting is to provide useful information to stakeholders.
True
What are some examples of transactions for a business?
- Receiving money from customers
- Purchasing goods from suppliers
- Payment of operating expenses
- Returning goods to suppliers
These transactions are essential for understanding the business’s financial activities.
What is the significance of accounting in business?
To address financial problems and provide necessary information to stakeholders
Effective accounting helps in decision-making and financial planning.
What does the financial position of the business allow for?
Decision making regarding:
* Whether the business can continue operating
* Whether the business can expand
* Whether to bring changes into the business
Financial position is crucial for assessing sustainability and growth opportunities.
