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Additional info for Financial Accounting: An Introduction, 4th Edition
Example text
ASSC (1975), para. 25. 18. , para. 26. 19. IASB (1989), para. 9(f). 20. uk 21. uk 22. IASB (1989), para. 9(g). 23. ICAS (1988), para. 7. 24. IASB (1989), Introduction, para. 6. 25. IASB (1989), para. 10. 26. qxd 12/4/06 13:39 Page 24 Supplement to Chapter 1 Introduction to the terminology of business transactions The following description explains the business terminology which will be encountered frequently in describing transactions in this textbook. The relevant words are highlighted in bold lettering.
What information does the company provide? 2 Find the financial highlights page. What are the items of accounting information which the company wants you to note? Which users might be interested in this highlighted information, and why? 3 Is there any information in the annual report which would be of interest to employees? 4 Is there any information in the annual report which would be of interest to customers? 5 Is there any information in the annual report which would be of interest to suppliers?
The business may be started because the sole trader has a good idea which appears likely to make a profit, and has some cash to buy the equipment and other resources to start the business. If cash is not available, the sole trader may borrow from a bank to enable the business to start up. Although this is the form in which many businesses have started, it is one which is difficult to expand because the sole trader will find it difficult to arrange additional finance for expansion. If the business is not successful and the sole trader is unable to meet obligations to pay money to others, then those persons may ask a court of law to authorise the sale of the personal possessions, and even the family home, of the sole trader.