描述

A number of individuals agree to set up business together draw up partnership agreement Partnership can start trading any given time Must distinguish between business and domestic expense Need not make public its annual results - makes annual tax returns Sole Trader In law has unlimited liability (can loose house if sued etc) Need not make public its annual results - makes annual tax returns Avoids risks of unlimited liability by limiting the amount of liability by shareholders to the amount of equity paid into the company Accounting is defined as a series of processes, techniques and procedures used to identify, measure and communicate economic information which users find helpful in making decisions Types of Businesses makes annual results public to protect creditors and others must be audited by auditors Company A company's OE is termed share capital and is split into individual shares usually expressed in small units - par value or nominal value Service Function Economic Info Definition Accounting Statement of company's Assets and Liabilities on a given date Communication device Module 1 FA + NCA (CA-CL) = OE (Capital & profit) An Introduction and the Accounting Equation Balance Sheet FA + NCA = net assets Shows the company's Profit and loss account The Accounting Equation Sales - COS = GP GP - expenses = NP Identified then measured A - L = 0E Income Statement Sources of cash vs uses of cash A = 0E + L Accounting Statements Cash flow Portays only those economic events of a business that affect cash flows Items of expenditure accounted for via the B/S we call Capital expenditure Itens of expenditure accounted for via the IS we call Revenue expenditure Items that the company has to pay sooner or later OE = Liabilities Businesses need these to do business with - cash or non cash Retained profits of the company over its history Definitions Fresh issue of shares throughout the life of the Co (if any) Original share capital paid by

AI 摘要