Secondary 5 Business, Accounting and Financial Studies

The information system that identifies, records, classifies, summarises and reports business transactions to support decision-making.

The fixed sequence from recording transactions, posting, preparing the trial balance to preparing the financial statements, repeated each period.

Assets equal liabilities plus capital; the two sides remain equal after every transaction.

Resources owned by the business that bring future economic benefits, such as cash, inventory and equipment.

Debts owed by the business to outsiders, such as bank loans and accounts payable.

The funds invested by the owner and the owner's claim on the business: assets minus liabilities.

Business dealings that change the assets, liabilities or capital of the firm, such as purchases, sales and paying expenses.

The recording part of accounting — entering transactions in the journals and ledger; narrower in scope than accounting.

The output of the accounting cycle, mainly the profit and loss statement and the statement of financial position.

Internal users (owner, managers) and external users (banks, investors, the tax authority) who rely on financial information for decisions.

The rule that every transaction is recorded with at least one debit and one credit of equal amount.

The left side of an account; increases in assets and expenses, and decreases in liabilities, capital and income, are debited.

The right side of an account; increases in liabilities, capital and income, and decreases in assets and expenses, are credited.

The book holding all accounts, into which journal entries are posted by account for balancing.

A record of the increases and decreases in one category of items, often shown as a T-account, debits left and credits right.

A period-end list of all ledger account balances; total debits should equal total credits, checking arithmetical accuracy.

Customers who bought on credit and owe the firm money — an asset of the business.

Suppliers to whom the business owes payment for goods bought on credit — a liability.

The account for goods bought for resale during the period; expense in nature and debited when increased.

The income account for goods sold during the period; credited when increased.

The statement reporting the period's results: sales minus cost of goods sold gives gross profit, then expenses give net profit or loss.

The statement listing assets, liabilities and capital on one day; the two sides must total the same amount.

The cost of goods sold in the period: opening inventory plus purchases minus closing inventory.

Sales revenue minus cost of goods sold, before deducting operating expenses.

Gross profit minus all operating expenses; transferred to increase capital.

Cash or goods the owner takes from the firm for private use; a reduction of capital, not an expense.

The firm is treated as separate from its owner; business and private finances are recorded apart.

The assumption that the firm will continue operating for the foreseeable future.

Assets are recorded at their actual purchase cost and not adjusted for market movements.

Income and expenses are recognised when transactions occur, regardless of cash timing.

The six functions supporting a firm's operation: human resources, financial, operations, marketing, information and risk management.

Recruiting, training, appraising and retaining staff so the firm has suitable people.

Raising funds, budgeting, controlling costs and managing cash flow to keep the firm financially sound.

Arranging production, purchasing materials and ensuring quality and on-time delivery of goods and services.

Conducting market research, pricing, promotion and distribution to bring products to customers.

Collecting, storing and analysing business data and safeguarding information to support decisions.

Identifying business risks and reducing potential losses through insurance, diversified suppliers and other strategies.

Hong Kong definition: firms with fewer than 100 employees in manufacturing or fewer than 50 in non-manufacturing.

The spirit of innovating, bearing risk and seizing opportunities, driving new ventures and economic development.

The philosophy of identifying and satisfying customer needs as the route to achieving business goals.

Systematically collecting and analysing market data to support marketing decisions.

Data collected first-hand by the firm for its own purpose, e.g. via questionnaires, interviews and observation.

Dividing the whole market into customer groups by geographic, demographic, psychographic or behavioural criteria.

The customer group a firm chooses to serve after evaluating the segments.

Building a distinctive image for the product in the minds of target customers.

The four controllable elements: product, price, place (distribution) and promotion.

The four stages of a product — introduction, growth, maturity and decline — each needing different strategies.

Raising loyalty and repeat purchase through membership schemes, personalised service and after-sales care.

The routes by which goods reach customers, e.g. direct sales, retailers or online platforms.

The function coordinating planning, recruitment, appraisal, pay and training to place the right people in the right jobs.

Analysing the current workforce, forecasting demand, comparing supply and demand, and drawing up action plans.

Finding and selecting suitable candidates for vacancies, internally or externally.

Filling vacancies by promotion or transfer — cheap, culturally familiar and motivating.

Regularly evaluating performance to inform promotion, pay, training needs and work improvements.

What employees receive for work: monetary rewards (pay, commission, bonuses) and non-monetary rewards (recognition, promotion prospects).

Protections beyond pay — medical insurance, paid leave, MPF contributions — that strengthen belonging.

Raising current job skills and preparing for advancement, via on-the-job training, off-the-job courses and job rotation.

Needs progress from physiological, safety and social to esteem and self-actualisation; lower levels must be met first.

Hygiene factors (pay, conditions) only remove dissatisfaction; motivators (achievement, recognition, responsibility) create drive.