topic 1 Flashcards
(16 cards)
1
Q
accounting definition
A
Accounting is the process of identifying, measuring, recording, and communicating financial info to help users make decisions.
2
Q
Role of Accounting
A
- Record-keeping
- Decision-making support
- Used by individuals, businesses, governments
- Helps manage cash flow, performance, and growth
3
Q
Accounting Process (4 Steps)
A
- Identify transactions/events
- Measure in $$ (monetary terms)
- Record in the system (journals, ledgers)
- Communicate in financial reports
4
Q
2 branches of Accounting
A
- financial accounting
- management accounting
5
Q
financial accounting
A
- For external users
- Regulated, standardised
- Publicly available (e.g. ASX)
- Used in this unit
6
Q
management accounting
A
- For internal users
- Internal, flexible, project-based
- Confidential
- not needed yet
7
Q
Internal users of accounting info
A
- Managers, directors
8
Q
external users of accounting info
A
- Investors, lenders, ATO
- general purpose
9
Q
primary users
A
- Investors, lenders
- Provide resources
- Target of financial reporting
10
Q
other users (external)
A
- Gov, public, suppliers
- Don’t directly provide resources
- Can use reports, but not designed for them
11
Q
financial reporting purpose
A
To provide useful financial information to existing and potential investors, lenders, and creditors for resource decisions.
12
Q
Annual Reports – What’s Inside?
A
- Financial Statements (with notes)
- Director’s Report
- Corporate Governance Statement
- Auditor’s Report
- Chairman’s Message
- Five-Year Financial History
- Key Dates (dividends, AGM)
13
Q
ASIC role
A
Administers Corporations Act, monitors compliance
14
Q
AASB
A
Issues Accounting Standards, aligns with IFRS
15
Q
ASX
A
Enforces listing rules for public companies
16
Q
Corporations Act
A
- Applies to all companies in Australia
- Requires general purpose financial statements
- Ensures transparency, accountability, investor protection
