Purpose of accounting

What is accounting?

• Recording money coming in to a business

• Recording money coming out of a business

• Recording money coming in and out of a business

• Recording a bank account

What job can a person have in accounting?

• Nurse

• Teacher

• Accountant

• Chef

A receipt is an example of how a business can record transactions

• True

• False

What is money coming IN to a business?

• Income

• Expenditure

What is money going OUT of a business?

• Income

• Expenditure

What is compliance?

• When a business gives correct information about money coming in and out of a business

• When a business does NOT give correct information about money coming in and out of a business

What happens if a business does not give the correct financial information?

• Pay a big fine

• The accountant may go to jail

• The business may close

• All of the above

A business makes a profit. What does this mean?

• Money in (sales revenue) is more than money out (expenditure)

• Money out (expenditure) is more than money in (sales revenue)

A business makes a loss. What does this mean?

• Money in (sales revenue) is higher than money out (expenditure)

• Money out (expenditure) is higher than money in (sales revenue)

If a business makes a profit, what does this mean about business performance?

• Good performance

• Bad performance