3. Business Cycles Flashcards

0
Q

What are the main objectives of internal control?

A
  1. Record transaction properly

2. Reports are accurate, valid and complete

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1
Q

What does the accounting system do?

A

Provides the foundation to achieve the objects of internal control?

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2
Q

What is an accounting system?

A

A series of tasks and records by which transactions are processed into financial records

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3
Q

What are the major elements of the accounting system?

A

People and paper

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4
Q

What are the different business cycles?

A
  1. Revenue and receipts
  2. Acquisition and payment
  3. Inventory and production
  4. Payroll and personnel
  5. Finance and investment
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5
Q

What statement do balances refer to?

A

SOFP

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6
Q

What statement do transactions refer to?

A

SOCI

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7
Q

What balances relate to the revenue and receipts cycle?

A
  1. Accounts receivable

2. Cash and cash equivalents

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8
Q

What transactions relate to the revenue and receipts cycle?

A
  1. Credit sales
  2. Cash sales
  3. Interest received on sales
  4. Discounts allowed
  5. sales returns
  6. Credit losses
  7. All receipts
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9
Q

What balances relate to the acquisition and payment cycle?

A
  1. Accounts payable
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10
Q

What transactions relate to the acquisition and payment cycle?

A
  1. Credit purchases
  2. Cash purchases
  3. Purchase returns
  4. Discount received
  5. Interest paid on purchase debts
  6. Expenses
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11
Q

What balances relate to the inventory and production cycle?

A
  1. Inventories
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12
Q

What transactions relate to the inventory and production cycle?

A
  1. Cost of sales
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13
Q

What balances relate to the payroll and personnel cycle?

A
  1. Bank and cash

2. Accounts payable (accumulated leave, unclaimed wages etc,)

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14
Q

What transactions relate to the payroll and personnel cycle?

A
  1. Salaries and wages
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15
Q

What balances relate to the finance and investment cycle?

A
  1. Share capital
  2. Reserves
  3. Long-term loans
  4. PPE
  5. Investments
16
Q

What transactions relate to the finance and investment cycle?

A
  1. Dividends paid
  2. Interest paid
  3. Profit and loss
  4. P/l on sale of asset
  5. p/l on investment