MUHASEBE I - Deneme Sınavı - 17

This system includes three kinds of basic activities which are identifying, recording and communicating of the financial transactions of an entity.

Al of them are true for accounting information system.

The first step of the accounting process consists of identifying the financial transactions related with the organisation. The sale of a table by a furniture shop, the payment of wages or the provisions for services are the examples of financial transactions.

Bookkeeping is an accounting action that usually refers only keeping of the chronological diary of financial transactions while the concept of recording includes classifying and measuring as well.

Managers of a company who plan, organize, and run the business are the most important group of internal users. Managers have different roles and these roles determine the main needs for using financial information. There are several types of external users and they can be individuals or organizations outside a company such as investors, creditors, taxing authorities, government, customers, suppliers etc.

Internal users can also need some detailed information which is not ready to use in basic and standardized financial statements. In these cases, managerial accounting procedures are applied to produce internal reports to help internal users in their decision making process.

Accounting standards are a set of principles and rules that companies follow when they prepare and publish their financial statements, providing a standardized way of describing the company’s financial performance.

The fair value principle states that assets and liabilities are reported at their fair value. If the company chooses to apply fair value principle, the reported value of the land will be 250,000 TL.

The going concern assumption assumes that the business entity will remain in operation forever. Under the going-concern concept, unless there is evidence to the contrary, accountants assume that the business will remain in operation long enough to use existing assets for their intended purpose.

300 x %30= 90 million TL Owners Equity

According to the basic accounting assumption;

Assets = Liabilities + Owner’s Equity

300 = Liabilities + 90

Liabilities= 210 million

Accounting is an information system that: • Identify business activities, • Record the business transactions and, • Communicates the results to decision makers

Recording plays a connective role between identification and communication activities and so refers a set of actions includes bookkeeping, classifying and measuring

Employees and managers are internal information users.

Ethics are the humanly devised rules, procedures and norms to judge one’s action as right or wrong, honest or dishonest and fair or not fair.

International Accounting Standards Board (IASB) which is a not-for-profit, public interest organization established to develop a single set of high-quality, understandable, enforceable and globally accepted accounting standards called International Financial Reporting Standards (IFRS). As of the end of 2017, 126 countries now require the use of International Financial Reporting Standards for all or most publicly listed companies, whilst a further 12 countries permit its use. On the other hand, The Financial Accounting Standards Board (FASB) is the primary accounting standard-setting body in the United States and issues Financial Accounting Standards that are called Generally Accepted Accounting Principles (GAAP) which is a common set of standards used by accountants in United States.

The fair value principle dictates that assets and liabilities should be reported at their fair values. Simply, fair value refers the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Therefore, contrary to historical cost principle, the recorded monetary amount of the asset should be revalued at reporting date according to the fair value principle.

In a sole proprietorship the owner is personally responsible for all the debts and liabilities of business. In short, there is no distinction between the business and its owner, but the accounting records of the business activities are kept separate from the personal records of its owner.

Liabilities + Owner’s Equity =  Assets

5.000 +10.000 = 15.000

Accounting is an information system which provides financial information about the entity for decision makers.

Accounting is an information system which provides financial information about the entity for decision makers. This system includes three kinds of basic activities which are identifying, recording andcommunicating of the financial transactions of an entity to interested users