The Role of Accounting in Business
Presentation
•
Business
•
University
•
Medium
Eunice Sibotoboto
Used 1+ times
FREE Resource
6 Slides • 9 Questions
1
Definition
The process recording of financial transactions (monetary terms), reporting the results of such a transaction and drawing up financial statements for decision making.
Summarises the transactions over an accounting period
record and report for use by stakeholders and shareholders
2
Communicating the finances of a Business
1 Identifying transactions
2. Record the transactions
3.Reporting through Financial statements
For use by Management, Lenders& Creditors, Government entities, Investors and Employees
Information must be understandable to users
3
Generally Accepted Accounting Principles
Use the link below to access the information
Businesses use GAAP while adhering to International Finance Reporting Standards. (IFRS)
4
Accounting concepts/terms
Use the prescribed reading material and any other to define the following terms:
Assets- Current vs non current
Liabilities- Current vs Non current
Owners' Equity
Income
Expenses
Profit
5
Basic Accounting Equation
Assets= Owners Equity + Liabilities
Understanding what accounts fit in the three elements allows for calculations.
Re-arrange the equation to calculate - Liabilities, Owners Equity.
6
Test your understanding
Use the following Quiz to test your understanding of the accounting concepts.
You can repeat as many times as needed to deepen your knowledge.
NB: Complete the study material before attempting the quiz
Enjoy!
Accounting for all chapter 1 , Finance for Non-Financial Managers chpt 1, Accounting concepts video
7
Multiple Choice
For the following 6 questions, Match the accounting principle with the statement given.
1. An entry is made for rent income at the end of a financial year. This was for the rent for the last month of the financial year that was still owing.
Prudence principle
Realisation principle
Accrual Principle
Matching principle
8
Multiple Choice
2. Sales and cost of sales are recorded simultaneously
Prudence Principle
Accrual principle
Realisation principle
Matching Principle
9
Multiple Choice
3. The account of a debtor who is having financial difficulty is written off.
principle of consistency
Prudence principle
Going concern principle
accrual principle
10
Multiple Choice
4. The method and rate of depreciation must be maintained year after year.
Principle of materiality
Principle of consistency
Realisation principle
Matching principle
11
Multiple Choice
5. An entry is made immediately in the books for an invoiced received for goods purchased
Principle of materiality
Realisation principle
Prudence principle
Accrual principle
12
Multiple Choice
6. Transactions that are important must be specifically shown in financial statements
principle of consistency
Going on concern principle
Principle of materiality
realisation principle
13
Open Ended
State any three users of the financial statements and what information they need from the statements
14
Open Ended
Classify the following accounts into Current assets, Non current Assets, Current Liability, Non-current Liabilities, Income or Expenses.
Creditors control, Salaries, Debtors' control, Sales, Mortgage bond, Bank overdraft, Investment in shares, Stationary, Trading Inventory, Interest on fixed deposit, Equipment, Cost of sales
15
Multiple Choice
Sihle is the proprietor of Sihle's Cafe. On 28 February 21.9, the business had the following assets and liabilities:
Equipment R110 000
Trading Inventory 20 000
Bank overdraft 10 000
Debtors control 12 000
Creditors control 15 000
Which of the following amounts reflect the Equity as at 28 Feb 21.9?
R63 000
R127 000
R117 000
R115 000
Definition
The process recording of financial transactions (monetary terms), reporting the results of such a transaction and drawing up financial statements for decision making.
Summarises the transactions over an accounting period
record and report for use by stakeholders and shareholders
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