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Additional resources for Cat - 1 Recording Financial Transactions (Int)
How does the accounting view of the relationship between a business and its owner differ from the strictly legal view? State the basic accounting equation. What is capital? What are drawings? Where do they fit in the accounting equation? What is the main difference between a cash and a credit transaction? What is an account payable? What is an account receivable? Define double entry bookkeeping. 2: Assets, liabilities and the accounting equation ⏐ Part A Introduction to transaction accounting Answers to Quick Quiz 1 A business's prime objective is earning a profit.
Simple legal contracts will have to be kept for six years, and more important sealed ones for twelve. Other documents may be kept at the organisation's discretion but the principle overall is: if you think you might need it, for as long as you might need it – keep it! 8 Data protection FAST FORWARD Information stored about individuals is regulated by Data Protection legislation. Storage of information is now regulated by the Data Protection Act in the UK which is concerned with storage of information about individuals.
Part A Introduction to transaction accounting ⏐ 2: Assets, liabilities and the accounting equation 41 Chapter Roundup • It is vital that you acquire a thorough understanding of the principles of double entry bookkeeping. These principles, outlined in this chapter and developed in Chapter 4, apply to both cash and credit transactions. • A business may be defined in various ways. Its purpose is to make a profit for its owner(s). • Profit is the excess of income over expenditure. • A business owns assets and owes liabilities.