stuff Flashcards

(22 cards)

1
Q

Define the term ‘Drawings’

A

Drawings - owner withdrew assets from the business for his own use.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Revenue recognition theory.

A

Revenue is recognised when goods are delivered to customers.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is the accounting equation?

A

Assets = Liabilities + Equity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Difference between trading and service business?

A

A trading business buys goods from suppliers and sell goods to customers, whereas a service business provides service to its customers.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What are the stages of the accounting cycle?

A

1) Identify and record
2) Adjust
3) Report
4) Close

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What are the three types of stakeholders who would be interested in the accounting information of a business?

A

1) Owner and shareholders
2) Employee, Managers, Customer, Competitors
3) Government, Competitors, Lenders, Suppliers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What kind of accounting information systems are there?

A

1) Source Documents
2) Journal
3) Ledgers
4) Trial balance
5) Financial Statements

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Why should Owners and stakeholders be interested in the businesses financial statements?

A

Owners and shareholders decide whether to continue to invest
in the business or to sell the business.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Why should Managers be interested in the businesses financial statements

A

Managers decide on ways to improve the performance of the
business.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Why should lenders be interested in the businesses financial statements?

A

Lenders decide whether to grant loans to business or not.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Suppliers..

A

Suppliers decide whether to sell to the business on credit or
not.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

the government…

A

Government decides whether business has complied with tax regulations and decides on the amount of tax to collect
Employees.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Employees

A

Employees decide whether to continue working at the
business or not.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Customers

A

Customers decide whether to buy from the business or not depending on whether the business can continue to provide the goods/service and after-sales service in the future.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Difference between bank loan and bank overdraft?

A

Bank loan is presented as long-term borrowings in non-current liabilities section in the statement of financial position.
Bank overdraft is presented in current liabilities section in the statement of financial position.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Under what accounting element does cost of sales belong to?

17
Q

Under what accounting element does Prepaid ____ belong to?

18
Q

What accounting element does Impairment loss on inventory belong to?

19
Q

What is the role of accounting?

A

Accounting is an information system that provides accounting information for stakeholders to make informed decisions [1] regarding the management of resources and performance of businesses.

20
Q

Why does an account have to have integrity

A

Integrity [1] - being straightforward and honest in all professional and business relationships.

21
Q

State one feature sole proprietorship

A

Owned by one person who contributes capital to set up.

22
Q

what is monetary theory?

A

Only business transactions that can be measured in monetary terms are recorded.