Term
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Definition
| A mechanism used to record monetary changes (increases and decreases) in financial statement items as a result of business transactions. |
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Term
| Accounting and auditing knowledge |
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Definition
| A category of the businessperson's knowledge base that includes the ability to construct accounting data, as well as the ability to use this data to make decisions, to exercise judgements, to evaluate risks and to solve problems. |
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Term
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Definition
| Steps that a business completes during each accounting period to record, retain and report the monetary information from its transactions. |
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Term
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Definition
| Assets=Liabilities +Owner's Equity |
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Term
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Definition
| Times span for which a business reports its revenues and expenses |
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Term
| accounting rate of return |
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Definition
| A measure of return on investment calculated by dividing the average net profit from an asset by the average investment in the asset. |
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Term
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Definition
| Process used to identify, measure, record and retain information about a business' activities so that the business can prepare its financial statements. |
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Term
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Definition
| Documents used to record and retain the monetary information from a business' transactions. |
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Term
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Definition
| Amounts owed to suppliers for credit purchases. |
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Term
| accounts payable subsidiary ledger |
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Definition
| The subsidiary ledger containing each of the individual accounts for suppliers (creditors). |
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Term
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Definition
| Amounts owed by customers to the business. |
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Term
| accounts receivable subsidiary ledger |
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Definition
| The subsidiary ledger containing each of the individual accounts for customers (debtors). |
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Term
| accounts receivable turnover |
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Definition
| Net credit sales divided by average accounts receivable. |
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Term
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Definition
| Recording revenues and related expense transactions in the same accounting period that goods or services are provided, regardless of when cash is received or paid. |
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Term
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Definition
| Incurred by a business during the accounting period but not paid or recorded. |
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Term
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Definition
| Earned by a business during the accounting period but neither collected nor recorded. |
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Term
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Definition
| Total amount of depreciation expense recorded over the life of an asset to date. |
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Term
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Definition
| Schedule prepared to prove the equality of the debit and credit balances in a business' general ledger accounts after it has made the adjusting entries. |
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Term
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Definition
| Journal entries that a business makes at the end of its accounting period to bring the business' revenue and expense account balances up-to-date and to show the correct ending balances in its asset and liability accounts. |
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Term
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Definition
| A person who has the authority to act for another person. |
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Term
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Definition
| The amount by which the value of an asset depreciates per year. This can be calculated as the initial cost of the asset less the residual value, divided by the useful life of the asset. |
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Term
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Definition
| Document that includes a business' income statement, balance sheet and cash flow statement, along with other related financial accounting information. |
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Term
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Definition
| Series of equal periodic future cash flows. |
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Term
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Definition
| A business' economic resources that it expects will provide future benefits to the business. |
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Term
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Definition
| Listing the characteristics of an object or idea to gain insights into its possible usefulness. |
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Term
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Definition
| The amount that is invested halfway through the asset's useful life. |
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Term
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Definition
| Costs that must be incurred to perform an activity at a given level, but that can be avoided if that activity is reduced or discontinued. |
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Term
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Definition
| The amount in an account column at the beginning of the period plus the increases and minus the decreases recorded in the column during the period. |
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Term
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Definition
| Difference between the total increases and the total decreases recorded in the account. |
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Term
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Definition
| Accounting report that summarises a business' financial position (assets, liabilities and owner's equity) on a given date. |
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Term
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Definition
| Procedure used to analyse the difference between the ending cash balance in a business' accounting records and the ending cash balance reported by the bank on the business' bank statement in order to reconcile the two. |
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Term
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Definition
| Statement that summarises a business' banking activities during the month. |
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Term
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Definition
| Asset's original cost minus the related accumulated depreciation. |
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Term
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Definition
| Process where members of a group try to generate as many solutions as possible to a particular problem. |
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Term
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Definition
| Unit sales volume at which a business earns zero profit. |
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Term
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Definition
| Report that gives a financial description of one part of a business' planned activity. |
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Term
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Definition
| Process of quantifying manager's plans and showing the impact of these plans on a business' operating activities. |
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Term
| Business Activity Statement(BAS) |
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Definition
| A form used by businesses that facilitates the payment and offset of tax instalments to the Australian Taxation Office (ATO) for a given period. It is used for reconciling the goods and services tax (GST) instalments, pay- as-you-go (PAYG) instalments company tax instalments and fringe benefit tax (FBT) instalments. |
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Term
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Definition
| Describes a business' goals and its plans for achieving those goals. |
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Term
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Definition
| Funds a business uses to operate or expand its operations. |
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Term
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Definition
| Cost that increases the benefits a business will obtain from an asset. |
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Term
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Definition
| Occurs when a business cannot obtain sufficient cash to make all of the investments that it would like to make, and thus must choose which of the acceptable proposals to invest in. |
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Term
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Definition
| Money on hand, deposits in cheque and savings accounts, and cheque and credit card invoices that a business has received from its customers but not yet deposited. |
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Term
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Definition
| Budget showing a business' expected cash receipts and payments and how they affect the business' cash balance. |
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Term
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Definition
| Percentage reduction of the invoice price if the customer pays the invoice within a specified period. |
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Term
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Definition
| A business' cash flows divided by the dollar amount of its assets or owner's equity. |
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Term
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Definition
| Accounting report that summarises a business' cash receipts, cash payments, and net change in cash for a specific time period. |
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Term
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Definition
| Numbering system designed to organise a business' accounts efficiently and to reduce errors in the recording and accumulating process. |
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Term
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Definition
| Balance sheet that shows subtotals for assets, liabilities and owner's equity in related groupings. |
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Term
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Definition
| Entries made by a business at the end of an accounting period to create a zero balance in each revenue, expense, and withdrawals T-account, and to update the owner's equity by transferring the balances in the revenue, expense, and withdrawals T-accounts to the T-account for owner's capital. |
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Term
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Definition
| A business entity that has been incorporated and registered by the Australian Securities and Investments Commission (ASIC) under the Corporations Act 2001. |
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Term
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Definition
| A separate legal entity that is independent of its owners and is run by a board of directors. |
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Term
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Definition
| Interest that accrues on both the principal and the past (unpaid) interest. |
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Term
| contribution margin per unit |
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Definition
| Difference between the sales revenue per unit and the variable costs per unit. |
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Term
| corporate social responsibility (CSR) |
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Definition
| An organisation's commitment to act in an ethical way in order to contribute positively to society and the environment. It is often referred to as the corporate ‘triple bottom line’ as it takes into account the economic, social and environmental impacts of business activities. |
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Term
| cost accounting (cost analysis) |
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Definition
| Process of determining and evaluating the costs of specific products or activities of a business. |
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Term
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Definition
| Weighted average cost (rate of return) a business must pay to all sources of capital. |
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Term
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Definition
| Dollar amount of merchandise on hand, based on a physical count, at the end of the accounting period. |
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Term
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Definition
| Major expense of a retail business consisting of the cost of the goods (merchandise)that it sells during the accounting period. |
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Term
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Definition
| Report showing a comparison between a business' budgeted and actual expenses for an accounting period. |
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Term
| cost-volume-profit (C-V-P) analysis |
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Definition
| Shows how profit is affected by changes in sales volume, selling prices of products, and the various costs of a business. |
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Term
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Definition
| Process of actively generating new ideas to discover solutions to a problem. |
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Term
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Definition
| Monetary amount recorded (credited) on the right side of an account. |
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Term
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Definition
| Business document that lists the information for a sales return or allowance. |
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Term
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Definition
| External parties to whom a business owes debts. |
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Term
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Definition
| Claims by creditors against the assets of a business. |
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Term
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Definition
| Uses thought processes to evaluate ideas independently and objectively to determine a way forward. |
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Term
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Definition
| Cash and other assets that a business expects to convert into cash, sell or use up within one year. |
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Term
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Definition
| Obligations that a business expects to pay within one year by using current assets. |
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Term
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Definition
| Current assets divided by current liabilities. |
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Term
| days sales in receivables |
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Definition
| A ratio that tells us how many days worth of sales are tied up in accounts receivable. |
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Term
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Definition
| Monetary amount recorded (debited) on the left side of an account. |
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Term
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Definition
| Total liabilities divided by total assets. |
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Term
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Definition
| Reasoning that moves from general to specific. |
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Term
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Definition
| A cash receipt that a business has added to its cash account but that the bank has not deducted from the cash balance reported on the bank statement because the cheque has not yet ‘cleared’ the bank. |
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Term
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Definition
| The systematic periodic transfer of the cost of a fixed asset to an expense account during its expected useful life. |
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Term
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Definition
| Subtracting the operating cash outflows from the operating cash inflows to determine the net cash provided by (or used in) operating activities on the cash flow statement. |
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Term
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Definition
| The rate used to convert a future amount to a present value. |
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Term
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Definition
| A formula that can be used to estimate the share price at any point in time. |
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Term
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Definition
| In the recording of a transaction, the total amount of the debit entries must be equal to the total amount of the credit entries for the transaction. |
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Term
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Definition
| Making connections among facts, ideas or experiences that are normally considered separately. |
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Term
| dual effect of transactions |
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Definition
| A business must make at least two changes in its assets, liabilities or owner's equity when it records each transaction. |
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Term
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Definition
| Purchasing (or producing) inventory, selling the inventory (or services), delivering the inventory (or services), and collecting and paying cash. |
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Term
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Definition
| First described by the World Business Council for Sustainable Development (WBCSD) in 1992, it is based on the concept of using fewer resources to deliver goods and services and thus reduce waste and pollution. |
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Term
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Definition
| A method of conducting business where companies and consumers buy and sell goods and services over the Internet. |
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Term
| end-of-period adjustments |
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Definition
| Increases or decreases to account balances at the end of the period to reflect the costs of providing goods or services that are not supported by source documents. |
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Term
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Definition
| Separation of accounting records of a business from the records of the business' owner or owners. |
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Term
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Definition
| Individual who is willing to risk the uncertainty of starting a business in exchange for the reward of earning a profit (and the personal reward of seeing the business succeed). |
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Term
| environmental management accounting |
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Definition
| Involves the management of the financial and environmental performance of business through the development and implementation of accounting systems and practices that reduce the environmental impacts of business activities. Environmental management accounting typically involves processes such as life cycle analysis, cost benefit analysis, material flow cost accounting and metrics such as eco-efficiency and share percentage to facilitate strategic environmental management initiatives. |
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Term
| environmental management expenses budget |
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Definition
| A list of predicted costs related to environmental management. |
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Term
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Definition
| Claims by creditors and owner(s) against the assets of a business. |
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Term
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Definition
| Management activity that measures a business' actual operations and progress against standards or benchmarks. |
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Term
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Definition
| Costs a business incurs to provide goods or services to its customers during an accounting period. |
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Term
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Definition
| Individuals outside of a business who use the business' information for decision making. |
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Term
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Definition
| Decimal amount in a present value table. |
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Term
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Definition
| Identification, measurement, recording, accumulation, and communication of economic information about a business for external users to use in their various decisions. |
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Term
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Definition
| A business' ability to adapt to change. |
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Term
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Definition
| Accounting reports used to summarise and communicate financial information about a business. |
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Term
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Definition
| Obtaining capital from the owner and providing the owner with a return on investment, as well as obtaining capital from creditors and repaying the amounts borrowed. |
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Term
| financing activities section |
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Definition
| Section of a business' cash flow statement (or cash budget) that shows the cash receipts and payments from its actual (or planned) financing activities. |
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