
Understanding Business and Its Purpose
A business is an entity that engages in economic activities such as buying and selling of goods and services.
A business is an entity that engages in economic activities such as buying and selling of goods and services.
The four factors of production that a business needs to produce goods and services are land, labor, capital, and entrepreneurship.
There are two ways of obtaining capital: via Equity Financing and via Debt Financing.
The three common legal forms of business are sole proprietorship, partnership and corporation.
The three types of business operations are service, merchandising and manufacturing.
Accounting is the systematic process of recording, summarizing and communicating financial information about a business that is useful for decision-making.
Accounting has evolved alongside economic, cultural, political, and technological changes throughout history.
An Accounting Information System is a systematic process of collecting and processing financial data into useful information and communicating it with interested parties for decision making.
The four major areas in the practice of accountancy are public accounting, commerce and industry, government accounting, and education and research.
The International Code of Ethics for Professional Accountants sets out ethical standards that are designed to guide professional accountants in the practice of their profession and in recognizing their responsibility to public interest.
Accounting Standards are set of rules and principles that help ensure that the information provided in the financial statements is relevant, reliable, comparable, and consistent.
Financial accounting is the branch of accounting that is involved with the preparation of financial statements for use by various stakeholders.
Basic accounting assumptions are concepts under which business transactions are recorded and financial statements are prepared. They enhance the understanding of the financial statements.
The Statement of Financial Position, also known as Balance Sheet, provides a snapshot of a company’s financial position at a specific point in time.
The Income Statement is a financial statement that shows information about the company’s income and expense items and its financial performance over a period of time.
A company’s statement of cash flows shows in detail the cash inflows and cash outflows related to the operating, investing and financing activities of the company over a period of time.
The Statement of Changes in Equity is a financial statement that describes in detail the activities that affect the net worth of the owners of a company over the years the latter operated.
Under Double-entry Bookkeeping, recording a transaction involves at least two accounts and will result in a two-sided entry in the journal.
Ledger Accounts are individual account records that makeup the general ledger of a company. Each ledger account is classified as an asset, a liability or an equity.
Accrual Accounting is an accounting method where revenues and expenses are recognized when earned or incurred, regardless if when cash is received or paid.
The Accounting Cycle refers to the sequence of activities and procedures in the company’s accounting information system that are performed throughout the accounting period.
A source document is an original document that serve as evidence that a transaction occurred in the business. They are used to record financial transactions in the accounting system of a company.
A business transaction is an exchange of items of value between two or more parties. It is stated in terms of money and should be supported by business documents that specifies the details of the transaction.
An accounting journal is where journal entries are initially entered on the accounting records. The 3 journal types are general journal, combination journal and special journal.
The General Ledger is a record that contains all the ledger accounts of a business. It provides a complete list of all the transactions that are entered in each account.
The Trial Balance is an internal report that presents all the company’s general ledger accounts and their balances at a point in time.
Adjusting entries are special journal entries that are posted to adjust certain ledger accounts at the end of the period to ensure that business transactions are recorded according to accrual accounting.
The general-purpose financial statements of a business includes the statement of financial position, income statement, statement of cash flows, and statement of changes in equity.
Closing the books is the process of bringing the balance of all temporary accounts to zero by posting closing entries. This process is done at the end of the accounting period after adjusting entries and financial statements have been prepared.
Reversing entries are journal entries that are posted at the beginning of a new accounting period to reverse some adjusting entries that were made at the end of the immediately preceding period.
A business is an entity that engages in economic activities such as buying and selling of goods and services.
The four factors of production that a business needs to produce goods and services are land, labor, capital, and entrepreneurship.
There are two ways of obtaining capital: via Equity Financing and via Debt Financing.
The three common legal forms of business are sole proprietorship, partnership and corporation.
The three types of business operations are service, merchandising and manufacturing.
Accounting is the systematic process of recording, summarizing and communicating financial information about a business that is useful for decision-making.
Accounting has evolved alongside economic, cultural, political, and technological changes throughout history.
An Accounting Information System is a systematic process of collecting and processing financial data into useful information and communicating it with interested parties for decision making.
The four major areas in the practice of accountancy are public accounting, commerce and industry, government accounting, and education and research.
The International Code of Ethics for Professional Accountants sets out ethical standards that are designed to guide professional accountants in the practice of their profession and in recognizing their responsibility to public interest.
Accounting Standards are set of rules and principles that help ensure that the information provided in the financial statements is relevant, reliable, comparable, and consistent.
Financial accounting is the branch of accounting that is involved with the preparation of financial statements for use by various stakeholders.
Basic accounting assumptions are concepts under which business transactions are recorded and financial statements are prepared. They enhance the understanding of the financial statements.
The Statement of Financial Position, also known as Balance Sheet, provides a snapshot of a company’s financial position at a specific point in time.
The Income Statement is a financial statement that shows information about the company’s income and expense items and its financial performance over a period of time.
A company’s statement of cash flows shows in detail the cash inflows and cash outflows related to the operating, investing and financing activities of the company over a period of time.
The Statement of Changes in Equity is a financial statement that describes in detail the activities that affect the net worth of the owners of a company over the years the latter operated.
Under Double-entry Bookkeeping, recording a transaction involves at least two accounts and will result in a two-sided entry in the journal.
Ledger Accounts are individual account records that makeup the general ledger of a company. Each ledger account is classified as an asset, a liability or an equity.
Accrual Accounting is an accounting method where revenues and expenses are recognized when earned or incurred, regardless if when cash is received or paid.
The Accounting Cycle refers to the sequence of activities and procedures in the company’s accounting information system that are performed throughout the accounting period.
A source document is an original document that serve as evidence that a transaction occurred in the business. They are used to record financial transactions in the accounting system of a company.
A business transaction is an exchange of items of value between two or more parties. It is stated in terms of money and should be supported by business documents that specifies the details of the transaction.
An accounting journal is where journal entries are initially entered on the accounting records. The 3 journal types are general journal, combination journal and special journal.
The General Ledger is a record that contains all the ledger accounts of a business. It provides a complete list of all the transactions that are entered in each account.
The Trial Balance is an internal report that presents all the company’s general ledger accounts and their balances at a point in time.
Adjusting entries are special journal entries that are posted to adjust certain ledger accounts at the end of the period to ensure that business transactions are recorded according to accrual accounting.
The general-purpose financial statements of a business includes the statement of financial position, income statement, statement of cash flows, and statement of changes in equity.
Closing the books is the process of bringing the balance of all temporary accounts to zero by posting closing entries. This process is done at the end of the accounting period after adjusting entries and financial statements have been prepared.
Reversing entries are journal entries that are posted at the beginning of a new accounting period to reverse some adjusting entries that were made at the end of the immediately preceding period.
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