Business/Economics/Accounting

What is a liability

Accounts Payable

Primary purpose of financial accounting is to…

Provide financial statements for decision making

Which of the following is not considered an asset?

Accounts Payable

The basic accounting equation is:

Assets = liabilities + owners equity

If a company purchases inventory on account, the transaction would:

Increase assets and increase liabilities

The statement of cash flows is divided into which of the following sections?

Assets, Liabilities, Equity

Debtor

A debtor is an individual, business or other party who owes money to another entity.

Creditor

A creditor is an individual, business or other party who another entity owes money to.

Entrepreneur

An entrepreneur is someone who takes on financial risks beginning or investing in a business that helps a gap in the market in hopes of profit.

Economy

An economy is the system in which goods and services are produced, distributed, and sold.

ABN

An ABN is a number for an Australian business

What are the 4 P’s of marketing?

Product, Price, Promotion, Place

Product

Identify what the product is and the needs and wants is helps with

Price

The best price for a product - it’s usually based on things like the supply and demand for the product

Promotion

How the product is promoted (tv ads, social media, etc) and who the promotion of the product is directed to

Place

How it is distributed to consumers

What are the three business types?

Sole trader, partnership, company

Sole trader

A business where it is run by a singular person, they don’t have to share profit, personally liable with everything including tax, easy to run and set up

Partnership

Is run by 2-20 people, you’ll have to share the profit, easy to set up and run, you are liable for things like tax

Company

More then 20 people run the company, no one is personally liable for things like tax, it’s harder to set up/run

What are the Management Styles?

Autocratic, Persuasive, Consultative, Participative, Laissez-faire

Autocratic

The manager tells staff what decision they have made

Persuasive

The manager attempts to sell decisions to their employees

Consultative

The manager consults staff before making decisions

Participative

The manager units with staff to make decisions together

Laissez-faire

Employees assume total control and responsibility of workplace operations

What are management skills?

Planning, decision making, communication, delegation, interpersonal, leadership

Planning

Process of determining business objectives and establishing strategies to achieve them

Decision Making

Skill of selecting the best course of action out of many options

Communication

Effectively transferring information from one person/party to another

Delegation

Being able to assign tasks for people based on their skills sets, and weaknesses

Interpersonal

Skill of creating positive interaction with employees to gain beneficial professional relationships

Leadership

Skill of motivating others to complete a business objective

Examples of financing a business

Bank Loans - will have to payback with interest

Self fund - get a job

Get support from others - friends, family, fools - will have to get their trust in the business and owe them something worth the money they put in

Economy types

Relative Scarcity, Traditional Economy, Planned Economy, Market Economy, Mixed Economy

Relative Scarcity

Where a community is running out of resources

Traditional Economy

An economic system where traditions, customs and beliefs shape goods and services the community makes, sells, and uses

Planned Economy

An economic system where a central authority, like the government directly controls production, distribution, and pricing of goods and services

Market Economy

An economic system where the production, distribution, and prices of good and services are guided by the supply and demand

Mixed Economy

An Economic system that blends free-market capitalism with government control

Supply

More made the more profit is being made since the price is higher

Demand

The more demand the higher the price of the product

Ethical Concern

Buying from a sweat shop

• Temu or Shein

• Pros = cheap, comes fast

• Cons = workers treated and paid poorly, quality of the product is bad

How to determine cash receipt journal products in the list

Says received cash… then in bracket is says (REC No. …)

How to determine cash payment journal products in the list

Says paid cash… then in bracket is says (Chq No. …)

Is it Cash Receipt or Cash Payment Assets Come From?

Cash Payment

Market Segmentation

Who the market is and how it’s promoted to them

Can include:

• Geographic - where

• Demographic - age/gender

• Purchase decision maker

• Income leve;