Provide the best word/s to describe each of the statements below. In order for financial statements to be useful to the different users, it should represent the financial performance, financial position and cash flows of the reporting entity. Information in the financial statements is relevant when it influences the economic decisions of users by helping them evaluate past, present of future events relating to an entity and by confirming or correcting past evaluations they have made. Users must be able to compare the financial statements of an entity over time, so that they can identify trends in its financial position and performance.
Provide the best word/s to describe each of the statements below.
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In order for financial statements to be useful to the different users, it should represent the financial performance, financial position and cash flows of the reporting entity.
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Information in the financial statements is relevant when it influences the economic decisions of users by helping them evaluate past, present of future events relating to an entity and by confirming or correcting past evaluations they have made.
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Users must be able to compare the financial statements of an entity over time, so that they can identify trends in its financial position and performance.
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The expense incurred when trading inventory previously purchased is sold.
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A = O+ L
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According to this principle, the books of account should not reflect the personal affairs of the wealth of the owner(s) outside of the business. It assumes that the books of the business are drawn up to reflect the wealth (or equity) of the owner inside his business only.
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Owner’s account used to record transactions that take place between the business and its owner(s).
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From time to time, the owner may wish to take money or other assets out of the business.
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The system that specifies that accounts that represent sources of funds increase on the credit side and accounts that represent applications of funds increase on the debit side such that for every transaction the accounting must always balance AND the total debits must always equal the total credits (in monetary value).
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The language of business and is the system for recording business financial transactions.
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Tax that is levied on almost all goods and services provided.
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Although the vendor charged output VAT, the subsequent acquirer of the goods or service may not claim input VAT on them.
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An internal source document used to record payments out of the petty cash box.
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