Accounting chapters 1-6 extras
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Created by:
johnfdhartman on March 27, 2012
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23 terms
Terms | Definitions |
|---|---|
 The two main company structures | Propriety Companies, Public Companies |
| The four types of public company | Companies where capital is limited by shares, companies where share capital is limited by guarantee, no-liability companies, unlimited share capital companies. |
| The two types of share | Ordinary shares, preference shares. |
| The advantages of companies as a business structure | Limited liability, separate legal entity, can gain capital via selling shares. |
| The disadvantages of companies as a business structure | More expensive and difficult to establish, must comply with more legal acts, subject to company tax, owners get little say in the company's direction. |
| The two types of trust | Family trusts, Unit trusts. |
| The advantages of trusts as a business structure | Minimal tax payments, limited liability, little regulation (unless they are listed on the ASX). |
| The disadvantages of trusts as a business structure | Additional complex laws apply, they require suitable, qualified accountants to run. |
| Source documents | Original documents that verify the transaction |
| Liquidity | The ability of an entity to meet its short term financial commitments |
| Recognition criteria of assets/liabilities | The future economic benefits/outflows must be probably, and they must be able to be measured reliably. |
| Contingent liability | A liability where the result depends on a future event. |
| Paid up share capital | The amount payed in by shareholders for shares in the company. |
| Minority interests in controlled entities | Claims on the net assets that belong to the shareholders of controlled entities. |
| Net realizable value | Expected selling price minus expected costs of getting the inventory to a saleable state. |
| Net market value | Amount gained from selling an asset minus the costs associated with selling it. |
| Value in use | Present value of expect cash flows from the asset's use and subsequent disposal. |
| Impairment | The expense incurred when the carrying value of an asset exceeds the recoverable amount. |
| Historical cost | The original cost of an asset. |
| Current cost | The cost of replacing an asset. |
| Market value | Expected cash from selling an asset. |
| Present value | Sum of discounted cash flows from an asset. |
| Fair value | How much the asset could be exchanged for between parties at arm's length. |
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