When you finish this chapter, you should: To understand the various business activities and business decisions that are made, to decide on the information that is needed for various decisions, to review the steps in the accounting cycle, to understand the principles of internal control. | Business activities and transaction processing Learning objectives To understand the various business activities and business decisions that are made. To decide on the information that is needed for various decisions. To review the steps in the accounting cycle. To understand the principles of internal control. key terms account account code adjustment note assets chart of accounts control account current assets current liabilities expenses field file financial statements gross loss gross profit internal control invoice journal ledger key terms (cont.) liabilities master file net loss net profit non-current assets non-current liabilities owner’s equity posting record reserves retained profit revenues source document transaction file transaction processing Structure and characteristics of businesses Most common forms of ownership are: sole proprietorship partnership company Capital: an investment of cash or other assets required to establish a business Structure and characteristics of businesses Liability: amount owed by a business to others Equity: amount owed by a business to owners Retained profit: amount of profit not distributed Structure and characteristics of businesses Liabilities of a business: capital contributions by owners retained profit loans accounts payable bank overdraft Structure and characteristics of businesses Assets of a business: land and buildings plant and equipment motor vehicles furniture cash at bank accounts receivable inventory Business activities Organising capital Acquisition of premises and equipment Recruiting employees Acquiring inventory Manufacturing products Marketing and selling product/service Collecting amounts owing from customers Paying amounts owing to vendors Paying amounts owing to loans Paying amounts owing to employees Paying amounts owing to Australian Taxation Office Transaction processing procedures Consists of the following: capturing transaction data on forms called source documents recording transaction data in . | Business activities and transaction processing Learning objectives To understand the various business activities and business decisions that are made. To decide on the information that is needed for various decisions. To review the steps in the accounting cycle. To understand the principles of internal control. key terms account account code adjustment note assets chart of accounts control account current assets current liabilities expenses field file financial statements gross loss gross profit internal control invoice journal ledger key terms (cont.) liabilities master file net loss net profit non-current assets non-current liabilities owner’s equity posting record reserves retained profit revenues source document transaction file transaction processing Structure and characteristics of businesses Most common forms of ownership are: sole proprietorship partnership company Capital: an investment of cash or other assets required to establish a business Structure and characteristics of
