Accounting Definitions

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What is Accounting?	Accounting is the process of identifying, measuring, recording and communicating financial information in order to permit informed judgements and decisions by users of information.
What is Data?	Anything that can be measured and given a value
What is Information?	When figures are summarised or rearranged in a structured fashion
Quantitative Date	Informations expressed in numerical form and which is measurable
Qualitative Information	All other information such as legal, social, environmental or ethical matters etc
Financial Information	May include budgets, ratios, sales results and current interest rates
Non-Financial Information	may include benchmarks, staff turnover and market share
Relevance?	Financial Information mud have value in terms of assisting users in making and evaluating decisions about the allocation of financial, physical and human resources.
Reliability	Financial Information must be free from bias and undue error
Materiality	Information may be relevant in the general operations of an enterprise but might not be of significance when the entity is reporting
Comparability	This is achieved by comparing an entity at one point in time and over time or an entity with other entities at one point in time and over time
Understandability	Financial Information must be presented in a form that assists users in its understanding
Timeliness	Financial Information may lose its relevance if there is a long time span before the information is presented to interested parities.
Cost Vs Benefits	Accountants need to consider whether the provision of certain financial information will stimulate more benefits than the costs incurred.
Internal Users	Include all levels of management and other governing bodies of an organisation
External Users	Include present or potential investors and present or potential creditors
Clarify	The clarification stage involves setting the decision in its context by giving some thought to: objectives, problems diagnosis and constraints
Analyse	This staff involves doing the research and fact finding necessary to provide a sound base of information to support the decision making: involves information and ideas
Choose	Where the decision is made. Choices are made between small numbers of alternatives.
Execute	Once the decision has been made, you need to be sure it is put into practice and followed up. Finally review the decision to see how well you achieved your objectives following the three steps; planning, controlling and reviewing
Regulatory Frameworks	Companies have to comply with the regulations set out by the Australian Securities and Investments Commision
Accounting Entity	Any organisational unit for which accounting records are kept and about which accounting reports are prepared
Legal Entity	The law does not see the separation of the business from the owners in the case of sole proprietors and partnerships.
Reporting Entity	Any business or part of a business that prepared a report on its financial activities.
Accounting Process	This is the process required to convert raw transaction data to useable information for statement users.
Monetary Unit Concept	"Accountants consider only things that can be expressed in monetary terms"
Dual Aspect	Accountants see total assets as equal to total equities
Accounting Entity	Accountants consider a business to be separate and distinct from the owner.
Legal Entity	In the eyes of the law the owner and the business are seen as one in the case of sole traders and partnerships
Going Concern	Accountants assume that a business has an unlimited life and that it will continue to operate in the foreseeable future and in the same general line of business.
Accounting Period	Accountants split the life of the business up into arbitrary time periods for recording and reporting purposes
Historical Cost	Accountants normally value assets at the price paid to acquire them
Realisation	Accountants recognise revenue when goods or services have been delivered regardless of when cash for these is received.
Accrual Accounting	Accountants measure profit on the basis of revenue earned during the period and expenses used or incurred during the period
Consistency	Accountants consistently apply accounting procedures and policies from one period to the next
Prudence	Accountants should exercise care and caution when dealing with uncertainties in the measurement process.
Reliability	Accountants should disclose all information relevant to statement users
Materiality	Accountants record and report only those items which are material or important enough to affect the decisions of statement users

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	Creado por Tess Morris hace alrededor de 11 años