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Define the three components of the accounting equation?
The accounting equation is as follows: ASSETS = LIABILITIES + EQUITY
Define the purpose of accounting and identify the four basic financial statements?
The purpose of accounting is provide information to the users like investors ,financial institutions and to other clients. The four basic financial statements are balance sheet,income statement,cash flow,statement of retained earning.
Define or describe the phrase 'red Flags explain the impact of red flags identified by auditors on each major phase of an audit?
Red flags are associated with a fraudulent item referenced on a financial statement. It could represent an accounting issue, unusual increase in financial growth or rapid financial decline.
Define debit and credit in accounting?
For P&L items Debit is what has gone and Credit is what is come. and for B/S items majorly Debits are our assets and Credits are our liabilities.
What are the four phases of accounting and define each?
Following are four phases of accounting:Recording - Recording in journalClassifying - Classifieng to ledgersSummarizing - Summarizing to financial statementsInterpreting - Financial ratios etc.
