POA: Intro to accounting

• Trading business


  A business that buys from suppliers and sells goods to customers

  
  

  eg. Clothing shop, bookshop
• Service Business


  A business that provides services to its customers

  
  

  eg. Transportation, banking services
• Stake holders


  groups of people who will make use of information about the business to make decisions.
• owners and shareholders


  Whether to continue to invest in the business or sell the business, depending on risks and returns related to business.
• Managers


  Whether to consider ways to improve the performance of the business
• Employees


  Whether to continue working at the business
• Lenders


  Whether to grant loans to the business, depending on the business' ability to repay the loan principal and pay interest
• suppliers


  Whether to sell to the business on credit, depending on its ability to pay
• Customers


  Whether to buy from business, depending on the business' ability to provide the goods and services that they need and good after-sales service.
• Government


  Whether business complies with tax regulations and the amount of tax to collect from the business
• competitors


  Whether they are compatible to the business and how to improve their own performance
• Role of accounting


  an information system that provides accounting information for stakeholders to make informed decisions regarding management of resources and performance of business

  
  

  (decide on what to do)
• Role of accountant


  prepare and provide accounting information for decision-making.

  
  

  sets up an accounting information system and become stewards of business

  
  

  (manage business not own biz)
• Accountant with integrity


  Is straightforward and honest in all professional relationships.
• Accountant who is objective


  Will not let bias, conflict of interest or the undue influence of others override his or her professional judgements.
• Accounting period theory


  The life of a business is divided into regular time intervals (yearly)
• Going concern theory


  A business is assumed to have an indefinite economic life unless there is credible evidence that it may close down
• Monetary Theory

  Only business transactions that can be measured in monetary terms are recorded

  
  

  (anything related to money)