An accountant is a person who only collects money for a business.

An account is a record that summarizes financial transactions for a specific item or person.

Assets are resources owned by a business, such as cash and land.

Liabilities represent profits of a business.

Owner's equity equals Assets - Liabilities.

Revenue means money earned from selling goods or services.

Expense is the money the owner invests in a business.

Owner's capital refers to the owner's initial investment in the business.

Owner's withdrawal means money taken by the owner for personal use.

A service business provides intangible products.

A trading business manufactures goods from raw materials.

A manufacturing business sells ready-made goods without changing them.

A hybrid business combines two or more types of business.

A law firm is an example of a service business.

A supermarket is an example of a service business.

A car factory is an example of a manufacturing business.

A coffee shop that makes drinks and sells packaged beans is a hybrid business.

Trading businesses cannot make a profit.

Service businesses are always more profitable than trading businesses.

A sole proprietorship is owned by one person.

In a sole proprietorship, the owner has unlimited liability.

An LLP provides limited liability to partners.

In an LLP, partners are personally liable for other partners' wrongful acts.

A PLC can raise funds by issuing shares.

A sole proprietorship always has higher credibility with banks than a PLC.

A PLC offers the lowest personal risk to owners.

In an LLP, ownership is shared among two or more partners.

A sole proprietorship has unlimited lifespan.

Ownership in a PLC is transferred through shares.

Owners and shareholders decide on dividends and major strategies.

Managers make day-to-day operational decisions.

Employees decide how to distribute company profit.

Lenders decide on giving loans and terms of repayment.

Suppliers decide on delivery schedules and pricing.

Customers influence demand and quality expectations.

Government decides on company branding and product quality.

Competitors directly decide your company's pricing.

Stakeholders only rely on accounting information.

Employees may give suggestions for improvement.

Capital commitment means the amount investors agree to invest.

Gross profit margin shows how much a business keeps after paying for goods.

A high inventory turnover means inventory is selling slowly.

Low turnover means inventory risk of being obsolete.

DSI (Days Sales in Inventory) shows average number of days inventory is held.

A business wants a higher DSI for efficiency.

Accounts Receivable Turnover measures how efficiently a business collects credit sales.

High ART means receivables are collected slowly.

Non-current assets include land, buildings, and patents.

A trade discount is usually given for early payment.

Accounting tracks, organizes, and reports financial transactions.

The role of accountants is only to collect taxes.

Integrity means being honest and fair.

Objectivity means avoiding bias.

Confidentiality means sharing sensitive information with competitors.

Professional behavior means following laws and maintaining reputation.

Accounting entity means the business is separate from its owner.

Historical cost means recording assets at their market value.

Prudence means don't overstate income, anticipate losses not gains.

Revenue recognition means recording revenue when cash is received.

The accrual basis of accounting records transactions only when cash is received or paid.

Consistency means using the same accounting methods over time.

Going concern assumes the business will continue operating into the future.

Materiality means all transactions, no matter how small, must be recorded.

The monetary concept means only transactions measured in money are recorded.

Objectivity means financial information should be based on verifiable evidence.

The matching principle records revenues and expenses in the same period.

Gross profit margin is calculated after subtracting operating expenses.

A brick-and-mortar supplier operates only online.

A cash discount encourages customers to pay their bills quickly.