Accounting Terms

Is the process of identifying, measuring and communicating information to permit informed judgements and decisions by users of that information.

The routine steps in processing accounting data during an accounting period.

A method of accounting in which each item is entered as it is earned or incurred regardless of when actual payments are received or made.

*service potential or future economic benefits controlled by the entity as a result of past transactions or other past events
*money that goes to the pocket
*value that can be converted to cash
*a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity

*a financial report showing what a business owns(assets), owes(liabilities) and the owner's financial interest in the business(owners equity) as at a specific date
*summary of a company's financial status

*the amount of money (cash) going in and out of a company
*inflows and outflows of cash and cash equivalents

Information in a financial report is comparable when users are able to identify similarities and differences between that information and the information in other reports

*wearing out, consumption, or other loss of value of an asset which may rise form use, passage of time or obsolescence.

A part of a company's profit that is divided among the people with shares in the company

*money owed to the owner of a company
*the residual interest in the assets of the the entity after the deduction of its liabilities

*information must represent faithfully the transactions and other events that have occurred
*achieved when transactions are accounted for and presented in a way in which conveys their economic effect

Accounting with the primary purpose informing people who are external to the organisation

This concept assumes that the business entity will continue to operate indefinitely

A tax on consumer spending

*summary of income and expenses
*financial report showing the revenue, expenses and resulting profit (or loss) generated by the business for the period under review