Yr 10 Accounting

Question 1

What is Accounting?

Answer 1

The process of recording, summarising, analysing, and reporting financial transactions to provide information that is useful in making business decisions

Question 2

What is the Statement of Profit or Loss?

Answer 2

Shows how a business has performed over a period of time
Includes revenues (income) a business receives and the expenses (costs) it incurs to earn those revenues

Question 3

What is the Statement of Financial Position?

Answer 3

Provides a snapshot at a point in time of what the business owns/controls (assets) and the amount of money it owes (liabilities) as well as the value of the owner’s investment in the business (owner’s equity)

Question 4

What is Statement of Cash Flows?

Answer 4

Shows from where the business obtained cash during the period and how it was received (Operating, Investing, and Financing Activities)

Question 5

What is Operating Activities?

Answer 5

It is what a business does to generate income (use of cash - usually)

Question 6

What is Investing Activities?

Answer 6

It is what a business does to help the business grow (use of cash - usually)

Question 7

What is Financing Activities?

Answer 7

It is where a business gets funding (source of cash)