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Accounting terms cheat sheet: +20 concepts defined in plain language Accounting A system used to record more than just financial transactions. Done right, accounting (1) tracks and analyzes business transactions in total, (2) measures and improves the health of a business, as well as (3) reports financial results to investors, creditors, and
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Ensuring that we have a shared understanding of accounting and auditing terms with our clients is crucial for effective and efficient communication. To help with this shared understanding, we’ve developed an alphabetical list of the most commonly used accounting words and phrases. This glossary includes those terms that
Accounting: The process of gathering and preparing financial information about a business or other organisation in a form that provides accurate and useful records and enables decisions to be made. Accounting cycle: This covers everything from opening the 'books' at the start of the year to closing them at the end.
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30 free printable bookkeeping forms and templates in PDF for small business accounting, and student practice. Excel templates also available.
- Glossary
- Section 1 Introduction to Accounting
- The term Accounting
- Objectives of Accounting
- Who needs financial information?
- Financial information for businesses
- Glossary
- BOOKKEEPING
- Importance of Accounting to various information users
- Internal users
- Glossary
- External users
- Using financial information – the key questions
- Branches of Accounting
- Cost and Management Accounting
- Financial Accounting
- Auditing
- The business entity principle
- Money measurement
- Ethics
- Combating fraud
- Areas where fraud can occur in a business:
- Fraud can be combated by means of the following:
- Financial Risk Management
- Application of computers in Accounting records and their usefulness in business situations
- Advantages of a computerised system versus a manual accounting system
- Application and advantages of computers as tools for communication technology, for example electronic banking and e-mail
COMPLEMENTARY – each activity depends on the other INTEGRATED – treated as a combined whole Unit 1 What is accounting? Accounting is concerned with two separate but COMPLEMENTARY business activities: The detailed recording of all the financial transactions of the business (called bookkeeping). The preparation of periodic statements (or accounts) wh...
By the end of this section, you should be able to: explain the meaning of the term “accounting” explain the objectives of Accounting explain the importance of Accounting information to various users identify the branches of Accounting explain the principles of business entity and money measurement and illustrate with examples discuss ethics in the ...
Accounting is termed as the analysis, classification and recording of financial transactions, and the ascertainment of how such transactions affect the performance and financial position of a business. Accounting is therefore concerned with: recording of data classification and summary of data communicating what has been learned from the data.
The following are some of the objectives that you should achieve while studying this subject: use the accounting rules or concepts to analyse case studies and real business events interpret and evaluate accounting statements, systems and reports providing a means of developing a critical and analytical approach to quantative problems apply numeric ...
The day-to-day records of financial transactions are a vital part of running any kind of business. Of course individuals also have some financial records. Payslips show wages received like the Kumalo family in the picture below, bills show a person’s spending, and regular statements tell customers how much they have in the bank. So not only can the...
Businesses operate in a similar way to the Kumalo's, but with more formal systems for recording and using their financial information. Even in a small business the owner could not remember the details of every transaction, so some form of record
FORMAL – following an agreed method DOUBLE ENTRY BOOKKEEPING – a system of recording financial information which recognises that there are two aspects to every business transaction is needed. The development of monetary systems (gradually replacing direct exchange, known as barter) allowed the results of trade and commerce to be measured more exact...
Enabling preparation of periodic financial summaries and interpretation of it ACCOUNTING
Information needs to be communicated to interested parties. No business can operate in isolation. It needs other people and businesses to operate. Let us look at each of the external and internal users of the data and how the books of the business will be important to them.
• Owner: The owner obviously needs to see whether his/her investment has made a profit or a loss.
PROFIT – sales revenue less expenses (running costs) over a given time period ASSETS – any item of property a business owns or is owed LIABILITIES – what a business owes to others • Employees: As the employees are working for the business, they have a direct interest in the financial affairs of the business.
Banks and other financial institutions: They will be interested in whether the business will be able to repay loans, or whether its financial position is sound when loans are requested. Potential investors/Prospective buyers of the business: They want to see whether their investment will be worthwhile and will also be interested in the progress the...
It is essential to know two things about a business Is it making a PROFIT? What are its ASSETS, and are they enough to meet its LIABILITIES ? In any business, financial records are the main source of information providing answers to these key questions. The profit (or loss) of the business is measured over a certain time period and is shown in the ...
The subject Accounting covers a very broad range of relevant and related topics. It is divided into the following three branches:
That part of Accounting that has to do with the provision of information to interested parties inside the business, especially to managers, to help them with decisionmaking, planning, management and control, is called cost and management accounting.
Financial Accounting is that part of Accounting that has to do with the provision of information to interested parties outside the business. We know that parties like prospective buyers, the Receiver of Revenue, banks, future partners and investors will need information that will be provided by the financial accountants.
Auditing is that part of Accounting that determines whether recorded information is a true reflection of the business transactions that took place during an accounting period. Auditing is done in two ways. It can be done internally, that is when the business itself does it, or externally – when the business contracts an outside company to do it. Mo...
The business entity principle distinguishes between the accounting aspects of a business and those of the owner(s), which are regarded as quite separate from the business. That means that the business’ financial records will always be treated separately from the owners’ records – thus a sole trader’s private bank account is kept completely separate...
Only that information which can be expressed in terms of money is recorded in accounting statements. The many other factors that affect a business’ performance, but which cannot be measured or expressed in monetary terms, are ignored.
The word “ethics” refers to a set of moral principles or values that are embraced by a certain community. The business community, as part of the total community, also abides by certain written and unwritten laws. Some of these laws – or rather norms and values that can be taught (not inherited) – are: honesty self-control trustworthiness concern fo...
Fraud is at present one of the major causes of business failure. It involves deliberate deception. Employees, managers, directors and international crime syndicates are all potential white-collar criminals. Fraud is defined as “unlawful and intentional misrepresentation which causes actual prejudice, or which is potentially prejudicial to another.”...
Asset misappropriation cash/inventory supplies/assets can be stolen misuse of fixed assets Fraudulent financial statements Cheque fraud Computer crime
good staff development programmes sound mutual inter- and intra-personal relationships between employers and employees regular stocktaking internal audit external audit anti-corruption laws solid presentation techniques and procedures appropriate reaction planning
The main aim of any business is to make profit. In order to achieve this, a company needs to have clear objectives. However, no matter how clear your objectives are, with human beings around there will always be unwanted activities like theft, dishonesty, fraud and corruption. It is therefore important to anticipate and keep to the minimum as far a...
Computers are used in every sphere of society – and all over the world. Therefore, as Accounting is an integral part of the world out there, computers are used to record, store and retrieve Accounting information efficiently and effectively. In Accounting, computers are used for the following applications: Computerised ledgers and sets of books (so...
accurate and time-saving, providing the system is mastered processing of transaction much quicker than manual information can easily be stored and retrieved saves space, compared to many cumbersome files used in manual operations back-up copies assure that information cannot be lost comparisons with previous years can be done programs with built-in...
time-saving, as staff members need not to go to the bank for bank statements, for example, because statements can be drawn at any time making use of the Post Office is minimised, because e-mails can be sent more quickly and an answer received almost immediately credit transfers can be done electronically at any time of the day – no need to go to th...
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Apr 8, 2024 · What is Cash Sweeping? A cash sweeping system (also known as physical pooling) is designed to move the cash in a company’s outlying bank accounts into a central concentration account, from which it can be more easily invested. By concentrating cash in one place, a business can place funds in larger financial instruments at higher rates of return.
People also ask
What is a sweep account?
What is a cash sweep?
What balance should a sweep account reflect?
How do I know if a sweep account is out of balance?
Sep 26, 2017 · A sweep account is a general ledger account used to temporarily store financial information that will be offset by another transaction, such as when one company pays the expenses of another company but will be reimbursed by the other company.
