BUSS1030 Lecture Notes - Lecture 1: Sole Proprietorship, Financial Statement, Trial Balance
Document Summary
Conceptual framework(cf)- a set of concepts defining the nature, purpose and content of general-purpose financial accounting. Cf is made up of 4 components: objective of gpfr. Accounting is an information system that measures business activities, processes information and communicates financial information. To provide information useful for making investment and lending decisions. The entity concept-business activities and personal affairs of the owner are separate. Accounting time period concept-business activities should be reported over a standard time period. Cost principle-assets and services acquired should be recorded at their actual cost(reliable and objective) Qualitative characteristics: relevance, faithful representation, comparability, verifiability, timeliness, understandability. Source documents-provide a documentary evidence that a transaction occurred and internal control over the firm"s resources, e. g. cash receipts, invoices. Journal a list in chronological order of all the transactions for a business. Posting procedure where information is transferred from the general journal entries to the general ledger accounts. Assets= liabilities + capital - drawings + revenue - expenses.
