INTACC3

• The purpose of the annual report is to inform stakeholders about the company's performance during the year.
• AIS is the system of collecting processing transaction data and disseminating financial information to interested parties. it is a subsystem of MIS
• MIS is a set of data gathering, analyzing and reporting functions designed to provide management with the information it needs to carry out its functions
• PERSONNEL directly involved in accounting work
• ACCOUNTING POLICIES are the specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements
• Not all PFRS are applicable to an entity
• PROCEDURES or set of interrelated activities involving the originating, processing and reporting of financial and relevant information
• EQUIPMENT AND DEVICES used in the system to expedite work, to privide controls and prevent fraud and errors
• RECORDS AND REPORTS necessary to gather, process, store and transmit financial and other information
• The ACCOUNTING CYCLE represents the steps or procedures used in recording transactions and preparing financial statements. It implements the accounting processes.
• JOURNALIZING - the identified accountable events are recorded in the journals
• POSTING information from the journal are transferred to the ledger
• UNADJUSTED TRIAL BALANCE - the balances of the general ledger accounts are proved as to the quality of debits and credits
• ADJUSTING ENTRIES the accounts are updated as of the reporting date on an accrual basis by recording accruals, expiration of deferrals, estimations and other events
• ADJUSTED TRIAL BALANCE - the equality of debits and credits are rechecked after adjustments are made
• Preparing FS - information processed in the accounting system is communicated to users mainly through financial statements
• CLOSING THE BOOKS - this involves journalizing and posting closing entries and ruling the ledger where temporary accounts are closed, and the resulting profit or loss is transferred to an equity account
• POST CLOSING TRIAL BALANCE - the equality of debits and credits are again rechecked after the closing process
• REVERSING ENTRIES - usually made at the beginning of the next accounting period
• DOUBLE ENTRY SYSTEM - each transaction is recorded in two parts - debits and credits
• DUALITY - a value received and a value parted with; each transaction is recored in at least two accounts
• EQUILIBRIUM - requires each transaction to be recorded in terms of equal debits and credits
• TRANSACTION APPROACH - profit or loss is computed as the difference between income and expenses
• SPECIAL JOURNAL - transactions of similar nature
• LEDGER is a systematic compilation of a group of accounts
• ACCOUNT is the basic storage of information in accounting
• CHART OF ACCOUNTS is a list of all the accounts used by an entity
• Errors are revealed by a trial balance
• FALSE The first step in the accounting cycle is the preparation of journal entries
• TRUE A sale in exchange for a note receivable can be recorded in the special journal called sales journal
• TRANSPLACEMENT number of digits is incorrectly increased or decreased
• TRANSPOSITION - when digits in an amount are interchanged