Unit 1 & 2

Question 1

define transaction

Answer 1

and event occurring during the operation of the business which results in a financial change. It is an exchange of things

Question 2

what is the purpose of accounting?

Answer 2

to provide financial information for decision-making

Question 3

accounting standards are:

Answer 3

the principals, rules, and guidelines followed when preparing and presenting accounting information

Question 4

a public company

Answer 4

is listed on the stock exchange and is accountable to the public

Question 5

a private company

Answer 5

does not have shares in the market. it may be owned by one person or a small group of people. it is not accountable to the public

Question 6

what standards govern:

public companies in Canada?

private companies?

Answer 6

a) international financial reporting standards (IFRS)

b) the accounting standards for private enterprises (ASPE)

Question 7

what are four controls that encourage people to do the right thing in accounting are:

Answer 7

laws
business ethics
professional standards
accounting principles and standards