W1

Question 1

What is accouting?

Answer 1

Using information to inform decisions:
* Drives social and economic activities
* Guides and influences the behaviour of people
* Impacts our lives, social functions and development

Question 2

Accouting in a business environment

Answer 2

Goal –> Decision –> Financial information
* Goal: growth and expansion, source of finance
* Decisions: requried for business sucess
* Financial information: required for informed decisions (plus other info)

Question 3

Role of accouting in business

Answer 3

Identifying –> Measuring –> recording –> Communicating
* Identifying: considering economic transactions that affect business
* Quantifying these economic transactions
* Recording: recording, analysing and summarising economic transactions
* Communicating: preparing reports of these transactions and presenting them

Question 4

Stakeholders

Answer 4

• Banker: fund the businesses and want to know if it’s worth while
• Suppliers: want to know the business will pay them back
• Shareholders: concerned with the value of their dividend
• Employees: concerned with job secutiry
• Society: want to ensure businesses are sustanable and ethical
• Customers: impacted by quality and costs of g/s provided
• Government: want taxes and to ensure business operate in line with regulations
• Environment: Business operations affects environment

Question 5

Types of accouting:

Answer 5

• Financial: preparation and presentation of financial reports to external users
• Management: provides information for internal decisions
• Auditing: Independent examination of accounting data
• Tax: preparing tax return and payments

Question 6

Role of accounting

Answer 6

• Dynamic
• Technology use
• Leadership

Question 7

Form of business organisations - Sole trader

Answer 7

• Owned by one person
• No seperate legal existence - owner is fully liable for any debts the business incurs (i.e. unlimited liability - may use personal assets to pay off debt)

Question 8

Forms of business organisation - Partnership

Answer 8

• Owned by 2 or more individuals
  
  • Every partner has equal share of the business
• Unlimited liability

Question 9

Forms of business organisation - Company

Answer 9

• Organised as a separete legal entity grom owners and shareholders
• Limited liability (i.e. risk is limitied to their share)