Introduction to Accounting

External stakeholder: Government 1) What is their role in the business? 2) Explain what kind of decision making they will need by using a business accounting information

• Enforce tax regulations

• Provide financial loans to businesses

• Advise on marketing strategies

• Set product prices for businesses

State the difference between a trading business and a service business.

• A trading business provides services to its customers while a service business buys and sells goods to customers.

• A trading business buys and sells goods to customers while a service business provides services to its customers.

• A trading business and a service business are essentially the same.

• A trading business focuses on manufacturing products while a service business focuses on retail.

What does objectivity mean in accounting?

• Being biased when making professional judgments in the accounting process.

• Making decisions based on personal feelings and opinions.

• Being unbiased when making professional judgments in the accounting process.

• Following strict rules without considering the context.

What is profit?

• The total revenue generated by a business.

• The difference between a business’s income and expenses.

• The amount of money spent on marketing.

• The total assets owned by a business.

What are liabilities?

• Amounts owed by a business to others that must be repaid.

• Assets owned by a business that can be sold.

• Revenue generated from business operations.

• Expenses incurred by a business during a period.

What is income in accounting?

• Income is the amount earned from the activities by the business.

• Income is the total expenses incurred by the business.

• Income is the amount of money invested in the business.

• Income is the profit made after all expenses are deducted.

Name two features of a sole proprietorship.

• It is owned by one person who contributes capital to set up the business.

• It is owned by a group of partners who share profits and losses.

• The owner usually runs the business by himself or herself and has absolute control over it.

• It is a type of corporation that limits the owner's liability.

External stakeholder: Suppliers - What is their role in the business?

• Supply goods and/or services to the business

• Manage the company's financial investments

• Conduct market research for the business

• Oversee employee performance and training

What do accountants do?

• They prepare tax returns for individuals only.

• They act as stewards of businesses, managing the business on behalf of the owners and providing accounting information for decision-making.

• They only handle payroll for employees.

• They focus solely on auditing financial statements.

What is revenue?

• Revenue is the total profit after expenses are deducted.

• Revenue is the value of a business’s sales of goods or services.

• Revenue is the amount of money spent on marketing.

• Revenue is the total number of employees in a company.