Business transactions

Transaction

Exchange of value between accounts

Four questions

Analyze a business transaction: items changing, amount, increase/decrease, balance

Accounting period

Time covered by financial statement

Accounting Standards

Principles, rules, and guidelines for preparing accounting information

Private company

Not traded on stock market, owned by one person or small group

Public company

Listed on stock exchange, accountable to the public

Accounting standards (public company)

Must use Fair Market Value (IFRS)

Accounting standards (private company)

May use Accounting Standards for Private Enterprise or IFRS

International Accounting Standards Board

Determines international accounting standards

Canadian Accounting Standards Board

Determines accounting standards for Canada

Business ethics

Study of ethical dilemmas and decision-making in business

Code of ethics

Defines expectations for employee honesty and ethics at work

Code of ethics might include?

-General employee conduct while at work

-Gifts

-Confidentiality

-Conflicts of interest

General employee conduct

Expected behavior while at work

Gifts

Policy on receiving gifts at work

Confidentiality

Requirements for maintaining business and personal info confidentiality

Conflicts of interest

Definition and examples of conflicts of interest

Is a personal item a part of the business?

No

Examples of accounting standards?

Cost principle, business entity

If a liability lasts longer than a year, should it be recorded in accounts payable or bank loan?

Bank loan

If a liability lasts under a year, should it be recorded in accounts payable or bank loan?

accounts payable

cost principle

list at the acquisition cost

business entity

must be kept seperate