Accounting Basics —VCE Accounting
Unit 1
Recording - answer Sorting, classifying and summarizing information contained in the
source documents so that it is more useful.
Financial data - answer Raw facts and figures upon which financial information is
based.
Reporting - answer The preparation of financial statements that communicate financial
information to the owner, so that decisions can be made.
Financial information - answer Financial data that has been sorted, classified and
summarized into a more useable and understandable form.
Accounting - answer The collection, recording and reporting of financial information to
assist business owners in decision-making.
Source documents - answerPieces of paper that provide evidence the transaction
occurred as well as the details of the transaction.
Liabilities - answerThe sum of money a business owes to an external entity.
Assets - answerAn item of financial value controlled by a business that will assist in
earning revenue for the business over an extended period of time.
Current assets - answerAssets that are expected to be used up within the next 12
months.
Non-current liabilities - answerObligations that require payment beyond the next 12
months.
Owner's equity - answerThe amount left over for the owner once the firm has met all its
liabilities.
Current liabilities - answerObligations that require payment within the next 12 months.
Drawings - answerWithdrawals by the owner of a business, in the form of cash or other
items.
Capital contributions - answerAny injections, cash or otherwise, made by the owner.
Unit 1
Recording - answer Sorting, classifying and summarizing information contained in the
source documents so that it is more useful.
Financial data - answer Raw facts and figures upon which financial information is
based.
Reporting - answer The preparation of financial statements that communicate financial
information to the owner, so that decisions can be made.
Financial information - answer Financial data that has been sorted, classified and
summarized into a more useable and understandable form.
Accounting - answer The collection, recording and reporting of financial information to
assist business owners in decision-making.
Source documents - answerPieces of paper that provide evidence the transaction
occurred as well as the details of the transaction.
Liabilities - answerThe sum of money a business owes to an external entity.
Assets - answerAn item of financial value controlled by a business that will assist in
earning revenue for the business over an extended period of time.
Current assets - answerAssets that are expected to be used up within the next 12
months.
Non-current liabilities - answerObligations that require payment beyond the next 12
months.
Owner's equity - answerThe amount left over for the owner once the firm has met all its
liabilities.
Current liabilities - answerObligations that require payment within the next 12 months.
Drawings - answerWithdrawals by the owner of a business, in the form of cash or other
items.
Capital contributions - answerAny injections, cash or otherwise, made by the owner.
