Assets
Items of value owned by the business
Liabilities
Amounts owed by a business to external parties
Owners equity
The difference between the assets and liabilities of a business and equals the amount of the owners interest or investment in the business
Revenue
Income derived from the activities of the business
Expense
Costs incurred by the business in earning revenue
Accounts receivable
Any outside parties owed to the business
Accounts payable
Amounts the business oweds to external parties
Bank overdraft
When the business withdraws more money than they have
Unlimited liability
There is no limit the amount of owners private possessions that may be sold to pay debts of the business
Accounting entity assumption
Regards the business as separate and distinct from the owner
Legal entity
Regards the business and owner as the same
First objective
To provide information for decision making. Decisions concerning the efficient acquisition and allocation of economic resources
Second objective
To assist in discharging accountability. Responsibility to
provide information to enable users
to make informed judgements.
Third objective
Help evaluate performance. Evaluation of the performance of management in using resources efficiently, earning profits and achieving financial stability. The performance of individuals and groups within organisation evaluated by management or external users.
Definition of gst
The goods and service tax is a broad based tax of 10 percent on the supple of most goods and services consumed in Australia.
GST clearing
Most cases liability
GST collected
Liability account and credit nature
GST credits received
Negative liability and debit nature