1What is the role of accounting?
Accounting is an information system that provides accounting information for stakeholders to make informed decisions regarding the management of resources and performance of business.
2What is the role of accountants?
They act as stewards of businesses. They set up the accounting information system to provide accounting information for stakeholders to make informed decisions regarding the management of resources and performance of businesses
3What are the 2 professional ethics of accountants
Integrity and objectivity
4An accountant who has integrity?
Is straightforward and honest in all professional and business relationships
5An account who is objective?
Will not let bias, conflict of interest or undue influence of others override his/her professional judgement
6Why is it important for accountants to be ethical?
Because stakeholders place their trust in the information provided by the accountants
7What are the stakeholders in a business?
owners and shareholders, managers, employees, lenders, suppliers, customers, government, competitors
8What decision do owners and shareholders have to make
Whether to continue to invest in the business, depending on the risks and returns related to the business
9What decision do managers have to make
Whether to consider ways to improve the performance of the business
10What decision do employees have to make
Whether to continue working at the business
11What decision do lenders have to make
Whether to grant loans to the business on credit, depending on its ability to pay
12What decision do suppliers have to make
Whether to sell to the business on credit, depending on its ability to pay
13What decision do customers have to make
Whether to buy from the business, depending on the business' ability to provide the goods or services they need and good after-sales support
14What decision does the government have to make
Whether the business complies with tax regulations and to calculate how much tax to collect from the business
15What decision do competitors have to make
Whether they are comparable to the business and how to improve their own performance
16What are the 2 types of businesses?
Trading and Services
17What is a trading business
A trading business buys goods from suppliers and sells goods to customers for profit
18What is a services business?
A business that provides services to customers for profit
19What are the 3 forms of business ownerships
Sole proprietorship, Limited Liability Partnership, Private Limited Company
20What is the ownership of these 3
Owned by 1 person, 2 or more partners, 50 or less shareholders, all contributing capital
21What is the level of control of these 3
Owner has absolute control, control is shared among partners, shareholders have no control unless they are management
22What is the access to funds for these 3
Less likely due to lack of personal assets, more likely due to more personal assets, more likely due to more business assets for banks to lend money
23What is the risk for these 3
Owner is obliged to pay debts and loss, partners and shareholder not obliged to pay debts and losses
24What is the Transfer of Ownership for these 3
Notify the corporate regulatory authority, partners need to agree first, shareholders pay stamp duty to give away shares
25What is the lifespan of the business for these 3
as the owner is alive, until is wound up or struck off
26What is the administrative procedures for these 3
Minimal, few, must comply with statutory requirements and file annual financial reports