introduction to principles of accounts

All businesses are started with the aim of making ...

• Capital

• sound investments on the stock market

• A profit

• their owners popular

Control over money should be...

• strict

• lenient

• convenient

• necessary

Book-keeping is the process of recording...

• transactions in books of accounts or by using a computerized system

• everything that takes place in a business.

• money spent every day.

• how much money is paid to workers.

Accounting is the process that involves

• revealing how much money is in the bank

• budgeting what will be spent only

• reporting to stakeholders about potential profits

• preparing/presenting, analysing and interpreting financial statements

Two common financial statements prepared are the

• Trading and Profit and Loss Account and Balance Sheet

• Balance Sheet and Suspense Account

• Cash Book and Trading and Profit andLoss Account

• Control Account and Balance Sheet

Which of the following statements is true?

• Accounting includes Classifying data, Summarising data and recording financial data.

• Financial reports can be prepared right after book-keeping is complete.

• Financial reports and statements are useful to owners/investors, managers, governments, suppliers, employees and customers.

• Financial reports and statements are only useful to managers.

Sole Traders

• do not ever employ others

• are liable for all business losses/debts and benefit from all profits

• are selfish and unable to get along with others

• are primarily involved in street vending

Limited Companies

• are owned by the government

• can be private or public

• are separate legal entities and can sue and be sued

• limit the liability of shareholders to the same amount for each shareholder

What is a balance sheet?

• A final account

• A snapshot of the business' financial position of at a particular point in time.

• It shows the business' assets, liabilities and capital

Non-Profit organisations (Choose all that apply)

• include clubs and associations

• are formed for the benefit of their members

• are formed with the intention of making a profit.

• prepare Income and Expenditure Accounts