Introduction to Business Dersi 7. Ünite Sorularla Öğrenelim

What is ''Accounting'' ?

Accounting is an information system that provides reports to decision makers
about the economic activities and condition of a business.

What is ''accounting system'' ?

The method used to record and summarize the accounting data into reports is called an accounting system

What are the elements of ''Accounting System Process''?

Inputs Accounting Documents,

Processing,

Outputs.

What is ''Bookkeeping''?

Bookkeeping is the recording of a firm’s financial transactions which usually involves only the recording of budgetary events.

Who are Internal users of accounting information?

Internal users of accounting information are managers who plan, organize, and run a business.

Who are the External users?

External users are individuals and organizations outside a company who needs financial information about the company.

What is the function of ''Financial accounting''?

Financial accounting measures and records business transactions and provides financial statements that are based on generally accepted accounting principles (GAAP)

Describe ''Managerial accounting''?

Managerial accounting uses both financial accounting and estimated data
to aid management in running day-today operations and in planning future
operations

What are the main purposes of managerial accounting information?
 

The main purposes of managerial accounting information that is used within a business:

• Planning

• Decision Making

• Decision Making

What is the function of Managerial Accounting in terms of Focus and emphasis compared to Financial Accounting ?

• Future-oriented.
• Emphasizes decisions affecting the future (budget for 2018 prepared in 2017)

What does a private accountant work for?

A private accountant works for a business firm in any position not included in public accounting.

Who are Certified Public Accountants (CPAs)?

Certified Public Accountants (CPAs) are licensed professional accountants who serve the general public.

Why are Ethical considerations important to accounting?

Ethical considerations are important to accounting because users of accounting information must depend on the good faith of people involved in accounting activities.

What is an accounting system?

An accounting system is the composition of methods and procedures for collecting, classifying, summarizing, and reporting the financial and operating information of a business.

How is the accounting cycle?

The accounting cycle is a set of steps that are repeated in the same order every period to keep track of what happened in the business and to report the financial effect of those transactions.

What is ''The accounting equation''?

The accounting equation is the formula used to capture the company’s financial position at any point in time. Left side of the equation always equals the right side of the equation.

What are the basic steps in the recording process?

There are three basic steps in the recording process:

1. Analyze each transaction for its effects on
the accounts,
2. Enter the transaction information in a
journal,
3. Transfer the journal information to the
appropriate accounts in the ledger

What are the most important financial statements ?

The most important financial statements are the balance sheet, the income statement, and the cash flows statement.

A classified balance sheet groups together similar assets and similar liabilities, using a number of standard classifications and sections.What do the Liabilities and Owners’ (Stockholders’) Equity consist?

 -Current liabilities
 -Non-Current (Long-term) liabilities
 -Owners’(Stockholders’) equity

What is the operating cycle of a business?

The operating cycle of a business is the time between buying and/or creating a product or service and receiving the cash on its sale.

What does ''owners’ equity'' consist?

Owners’ equity consists of contributed capital, retained earnings and, other reserves.

What are ''Revenues''?

Revenues are increases in owners’ equity resulting from selling goods, rendering services, or performing other business activities.

What is ''Net income''?

Net income is the final figure, or “bottom line,” of an income statement.

What does ''Liquidity'' refer to?

Liquidity refers to a firm’s ability to meet shortterm obligations.

What is Net working capital (NWC)?

Net working capital (NWC) is the excess of the current assets of a business over its current liabilities.

What does the average collection period (ACP) measure?

The average collection period (ACP) measures the average number of days it
takes for the company to collect revenue from its credit sales.

What does ''financial leverage'' represent?

Financial leverage represents the degree to which a firm uses borrowed funds to
finance its assets.

What does ''net profit margin'' measure?

Net profit margin measures profitability after consideration of all revenues and
expenses, including interest, taxes, and nonoperating items.

What does ''return on equity (ROE)'' show?

Return on equity (ROE) shows how much net income the company earned for each dollar invested by the owners