FAC1502: FINANCIAL ACCOUNTING CONCEPTS; PROCEDURES AND CONCEPTS

ACCOUNTING - Answer-Planning; Recording; Analyzing; Interpreting financial information. PLANNING DECISIONS - Answer-Financial information is used to determine future actions. Historical information provided by the accounting process serves as a basis for forecasting. CONTROL - Answer-Using financial information to evaluate the results of financial activities. THE FUNCTION OF ACCOUNTING - Answer-1. The value added to the networth of a person/entity during a particular period. 2. The accumulated networth of that person/entity PROFIT ENTITIES - Answer-Sole traders; Partnerships; Close Corporations; Companies NON-PROFIT ENTITES - Answer-Clubs; Charitable Organisations; Churches; Educational Institutions; Trusts PUBLIC SECTOR - Answer-The Government; Provinces; Departments; Boards and Commissions; Municipalities USERS OF FINANCIAL INFORMATION - Answer-1. Investors - Providers of capital. Concerned with the risk involved in their investment. Need information to decide whether to invest, hold, or withdraw funds. 2. Employees - Interested in entity's stability and profitability for benefits and job security. 3. Lenders - Use financial information to determine if loans can be paid back with interest. 4. Suppliers and other trade creditors - Use informations for assurance that amounts owed are paid on time. 5. Customers - Need to know the state of the entity for reliability.