CIMA BA3 DEFINITIONS

Processing internal financial information to help management make decisions.

Accurately measuring financial information in order that it can be presented, in the form of financial statements, to external parties to enable their decision making.

The practice of recording monetary transactions for a business using duble-entry. Good bookkeeping is accurate, thorough and precise.

The responsibility of an accountant to properly present and look after the information and resources of on organisation.

An organisation where goods and services are exchange for one another for money.

Owned by one individual who is ultimately responsible for finances, e.g. self-employed builder

Owned by multiple individuals who share responsibility for the finances, e.g. a husband and wife own a restaurant.

viewed as a person in the eyes of the law with a separate legal identity from its Owners.

Investors, Analysts, Internal, Public, Lenders, Business contacts, Employees, Government.

Resources owned or controlled by entity which can either be sold for money, e.g. buildings, cash and products in production.

Money an entity owls or will owe, e.g. bank loans. Liabilities are usually someone else's assets,.

Mordy owa d to shareholders, including capital and the accumulation af profits. Equity also equals net assets.

Money received by a company during a certain period. Often this is revenue (money from sales) but it a lso includes things lik e interest on lans.

Amounts of money leaving a business in order to help generate revenue, e.g. cost of sales and wages.

The difference between what you earn and how much it cost you to earn it.

Known as the balance sheet this shows the assets, liabilities and equity of a business. Equity and liabilities should balance against assets. It provides a measure of the overall financial position of entity.

known as the profit and loss account, it shows a business's income, expenses and profit over time. It measures and compares income and outgoings to give an overall profit for period.

Show charges in the shareholder's equity over time.

Holds information on a business's cash flow over time. It shows where moneycomes from and what it has been spent on.

Accurate, thorough and precise.

A resource which a company has control of, that is expected to yield future economic benefits.

An obligation which will require an outflow of resources in order to settle.

A company's net assets, sometimes called capital.

The increase in economic benefits in the course of the accounting period.

The decrease in economic benefits during the accounting period.

Total amount of money taken related to sales.

Creating a standard and repeatabla method of measurement and creating a method of presenting these measurements in a useful and meaningful way.

top level of management (board), which deal with longterm plans.

Middle management (departamental heads), who deal with short-term plans.

lower management (team leaders) Who deal with day to day activities.

Collection of accounts

Summerarises all the transactions of a company

Things a business is holding for sales as part of its ordinary operations.

A record of all accounts of a Company