Principles Of Accounting Vyc1

Merchandising business – A business that buys goods from manufacturers and then sells them to consumers. (p.12)
Anything having its own separate identity, such as an individual, a town, a university, or a business. – entity
current ratio – current assets/current liabilities
Asset – An economic resource that is objectively measurable, results from a prior transaction, and will provide future economic benefit
Qualitative Characteristics: Fundamental Qualities: Faithful representation are… – 1. Completeness
2. Neutrality
3. Free from error
Tax Accounting – Reports to the government
4 reasons why capital change – Investments, withdrawals, revenue and expenses
____ are used to select unique documents from anywhere in the world.
debit memorandum – a form prepared by the customer showing the price deduction taken by the customer for returns and allowances
partnership – A form of business ownership in which two or more people share the assets, liabilities, and profits.
Closing entry for Income Summary account (Net Income) – Income summary: Owner's, Capital.
Owner's Equity: Increase.
Debit and Credit.
Balance Sheet and Statement of Owner's Equity
IAS 38 Intangible Assets – * An asset is a resource: controlled by a business as a result of past events; and from which future economic benefits are expected to flow to the business
* Eg. patents, copyrights, customer lists, licenses, marketing rights
* RECOGNISED when it is probable future economic benefits attributable to the asset will flow to the business; and the cost of the asset can be measured reliably
* NOTE: Internally generated goodwill must NEVER be recognised as an asset or recorded in the FS
* MEASURED initially at cost in the BS. A company can later choose either cost or revaluation method to value asset:
* Cost – shown in BS at cost less depreciation/IL
* Revaluation – shown in BS at revalued amount
* Can be depreciated like tangible assets – SL or DB
____ аre used tо select unique dоcuments frоm аnywhere in the world.
service business – A business that performs an activity for a fee.
External users – Individuals and organizations outside a company. Ex : investors, creditors, taxing authorities (IRS) , Regulatory agencies(security and exchange commission SEC ) , Labor unions, customers
What is the relationship between the financial statements? – Income statement—> retained earnings (net + beginning balance)—>Balance sheet (Beginning/Ending RE balances)
Unicorporated – Not registered to pay tax and has unlimited liability.
Term describing the handing in of petty cash vouchers for cash – Replenish

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