Accounting flashcards

What this deck covers

• Topic 1: Preparing and Presenting Accounting Information (29 cards, 6 dot points)

  • Balance Day Adjustments (SACE Stage 2 Accounting) (2)
  • Financial Statements for a Business (SACE Stage 2 Accounting) (5)
  • GST and Source Documents (SACE Stage 2 Accounting) (7)
  • Inventory: Perpetual, Periodic and FIFO (SACE Stage 2 Accounting) (4)
  • Recording Transactions: Journals and Ledgers (SACE Stage 2 Accounting) (4)
  • The Accounting Equation and Double-Entry (SACE Stage 2 Accounting) (7)
• Topic 2: Analysing and Interpreting Financial Information (16 cards, 4 dot points)

  • Efficiency and Financial Stability Ratios (SACE Stage 2 Accounting) (4)
  • Horizontal, Vertical and Trend Analysis (SACE Stage 2 Accounting) (5)
  • Interpreting Financial Performance (SACE Stage 2 Accounting) (2)
  • Ratio Analysis: Profitability and Liquidity (SACE Stage 2 Accounting) (5)
• Topic 3: Decision Making for a Business (18 cards, 4 dot points)

  • Budgeting and Cash Flow Management (SACE Stage 2 Accounting) (5)
  • Cost-Volume-Profit Analysis (SACE Stage 2 Accounting) (6)
  • Profit Versus Cash Flow (SACE Stage 2 Accounting) (3)
  • Relevant Costs and Short-Term Decisions (SACE Stage 2 Accounting) (4)
• Topic 4: Applying Accounting Concepts (13 cards, 3 dot points)

  • Accounting Principles and Ethics (SACE Stage 2 Accounting) (4)
  • Applying Concepts to New Situations (SACE Stage 2 Accounting) (5)
  • Business Entities and the Regulatory Framework (SACE Stage 2 Accounting) (4)

Sample cards from this deck

1. Definition

   GST and Source Documents (SACE Stage 2 Accounting)

   Define GST collected

   GST collected is the 10 percent added to sales; it is a liability because the business owes it to the ATO. GST paid (an input tax credit) is the 10 percent on purchases and expenses; it reduces the amount owed to the ATO.

2. Definition

   Horizontal, Vertical and Trend Analysis (SACE Stage 2 Accounting)

   Define Vertical analysis base

   In the income statement each item is shown as a percentage of net sales; in the balance sheet each item is shown as a percentage of total assets.

3. Definition

   Budgeting and Cash Flow Management (SACE Stage 2 Accounting)

   Define Budget

   A budget is a financial plan prepared in advance for a defined future period, setting out expected revenues, costs, receipts or payments against which actual performance can later be compared.

4. Definition

   Accounting Principles and Ethics (SACE Stage 2 Accounting)

   Define Materiality

   An item is material if omitting or misstating it could influence a user's decision. Immaterial items can be treated in the simplest practical way (for example, expensing a cheap stapler rather than depreciating it).

5. Definition

   Inventory: Perpetual, Periodic and FIFO (SACE Stage 2 Accounting)

   Define The two inventory systems

   Perpetual: a continuous record. Each purchase debits Inventory; each sale records two entries, one for the sale and one transferring cost from Inventory to Cost of goods sold.

6. Fill the gap

   Ratio Analysis: Profitability and Liquidity (SACE Stage 2 Accounting)

   It becomes useful through comparison: ___ (the same ratio over several years), benchmarking (against industry norms or competitors), and cross-checking (reading profitability and liquidity together).

   It becomes useful through comparison: trend analysis (the same ratio over several years), benchmarking (against industry norms or competitors), and cross-checking (reading profitability and liquidity together).

7. Definition

   Cost-Volume-Profit Analysis (SACE Stage 2 Accounting)

   Define Fixed and variable costs

   Fixed costs stay the same in total regardless of output over a relevant range (for example rent, salaries, insurance). Variable costs change in direct proportion to output (for example materials, packaging, sales commission per unit).

8. Definition

   Applying Concepts to New Situations (SACE Stage 2 Accounting)

   Define Ratio analysis

   Ratio analysis (Topic 2) to judge profitability and liquidity.

9. Definition

   Recording Transactions: Journals and Ledgers (SACE Stage 2 Accounting)

   Define Source documents

   Source documents (invoices, receipts, cheque butts, bank statements) provide evidence of a transaction.

10. Key fact

    Efficiency and Financial Stability Ratios (SACE Stage 2 Accounting)

    Tell me about Efficiency ratios

    Efficiency (activity) ratios measure how productively assets are managed. A higher inventory turnover means stock sells quickly, freeing cash and reducing the risk of obsolescence.