FNA1102
Terms
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- turnover
- net sales from continuing operation
- Current assets
- assets those company expects to convert to cash, sell, or consume in the next 12 months or within business's operating cycle.
- trade debtor
- amount company expects to collect from customers
- Liquid assets order
- cash, fixed deposits with banks and trade debtors are the most liquid assets in that order
- goodwill
- premium paid in the acquisition of subsidiaries
- transaction
- event that affects the financial position of the business enity
- trial balance
- lists all accounts with their balance
- revenue principle
- Record revenue when it is earned, usually when the business has delivered a good or service to a customer
- matching principle
- expenses incurred during the accouting period
- assets
- economic resources owned by the entity(as result of past transaction or event)
- liabilities
- obligation of entity to give up some of its assets to or perform services for non-owners(creditors)in the future + obligations arose from past transaction
- owners'equity
- owners' claims to the assets of the entity
- revenue
- (gross) assets received or to be received by an entity from providing goods to customers OR from investment
- expense
- (not related to liabilities)assets used up as a result of providing goods or services to customers or as a result of investments
- CFO
- receipts and payments of cash arising from the day-to-day operations of the company
- CFI
- receipts and payment from the buying and selling of investments or long term assets
- CFF
- receipts and payment of cash arising from seeking funds from shareholders and lenders
- Accounting equation
- Assets = Liabilities + owners' equity
- GAAP
- broad accounting concepts and accounting principles accounting standards for specific items other pronouncement
- accrual accounting
- record a business activities as soon as it affects financial position of the entity, regardless of whether it affects cash
- ledger
- the book of all the accounts of an entity
- chart of the account
- the contents page of the ledger
- Double-entry book keeping
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a.Every txn affects at least 2 accounts
b.Txn recorded with at least one debit and one credit
c.total debit=total credit for each txn