Term
| Which legal principle was developed to provide fairness in cases where the strict application of common law produced an unjust result? |
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Definition
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Term
| What classification of law governs the relationship between individuals and the state? |
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Definition
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Term
| What classification of law governs disputes between individuals or organisations, such as contract or tort law? |
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Definition
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Term
| Name the three primary bodies responsible for the development of law in the United Kingdom. |
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Definition
| Courts, tribunals, and parliament. |
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Term
| Term: Invitation to treat |
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Definition
| Definition: An indication of willingness to negotiate or receive offers, rather than a binding offer itself. |
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Term
| How does an offer differ from an invitation to treat? |
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Definition
| An offer is a definite promise to be bound on specific terms, whereas an invitation to treat is merely an opening for negotiation. |
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Term
| In contract law, what is the term for the price paid by one party for the promise of another? |
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Definition
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Term
| A contract where one party lacks the legal ability to enter the agreement is described as being _____. |
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Definition
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Term
| Under what condition is a contract discharged by performance? |
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Definition
| When both parties have fully fulfilled all their obligations as specified in the agreement. |
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Term
| What is the primary legal remedy intended to compensate the claimant for financial loss resulting from a breach of contract? |
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Definition
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Term
| The forces of supply and demand that determine pricing and output are part of the _____ environment. |
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Definition
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Term
| In an effective tax system, the principle of 'equity' means that taxes should be based on what factor? |
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Definition
| The ability of the taxpayer to pay. |
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Term
| Which principle of an effective tax system states that taxpayers should know exactly when, where, and how much they must pay? |
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Definition
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Term
| The tax system principle of 'economy' focuses on what specific goal? |
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Definition
| Ensuring the cost of collecting the tax is low relative to the revenue raised. |
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Term
| Name the three categories of sources from which the government raises finance through the tax system. |
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Definition
| Individuals, businesses, and indirect taxes. |
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Term
| How do rising interest rates typically affect consumer spending? |
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Definition
| Consumer spending typically decreases as borrowing costs rise and the incentive to save increases. |
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Term
| What is the primary objective of Corporate Social Responsibility (CSR) for a business? |
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Definition
| To act in a way that benefits society and the environment while being accountable to stakeholders. |
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Term
| Concept: Triple bottom line |
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Definition
| Definition: A reporting framework that measures a business's success based on three pillars: social (people), environmental (planet), and financial (profit). |
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Term
| According to the AAT fundamental principles of ethics, what does 'integrity' require of an accounting technician? |
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Definition
| To be straightforward and honest in all professional and business relationships. |
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Term
| The ethical principle of _____ requires an accountant to not allow bias, conflict of interest, or undue influence to override professional judgements. |
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Definition
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Term
| What ethical principle is breached if an accounting technician discloses a client's financial information without legal or professional permission? |
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Definition
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Term
| What does the principle of 'professional competence and due care' require of an accounting technician? |
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Definition
| Maintaining professional knowledge and skill at the level required to ensure a client receives competent service. |
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Term
| Why is it important for an accounting technician to comply with the AAT Code of Professional Ethics? |
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Definition
| To maintain the standards of the profession and protect the public interest. |
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Term
| Simply complying with regulations may not always constitute _____ behaviour. |
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Definition
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Term
| The 'entity concept' in business ownership states that a business is _____ from its owners. |
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Definition
| Legally and accounting-wise distinct |
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Term
| Which business structure features a single owner who has unlimited personal liability for all business debts? |
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Definition
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Term
| What is the primary advantage of a Limited Liability Partnership (LLP) over a traditional partnership? |
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Definition
| The partners' personal assets are protected as their liability is limited to the amount they invested. |
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Term
| Which tax is specifically applicable to the profits made by limited companies? |
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Definition
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Term
| What does 'limited liability' mean for the shareholders of a company? |
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Definition
| They are only liable for the debts of the business up to the nominal value of their shares. |
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Term
| Name one statutory book that a limited company is required by law to keep. |
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Definition
| The register of members (or register of directors). |
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Term
| Why might a business choose to use an 'off the shelf' company rather than forming a new one from scratch? |
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Definition
| It provides a quick and ready-made legal structure for immediate trading. |
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Term
| In terms of business names, what is the primary restriction regarding 'similar' names? |
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Definition
| A business name must not be so similar to an existing name that it is misleading to the public. |
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Term
| List three common functional areas found within a large business organisation. |
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Definition
| Finance, human resources, and sales and marketing. |
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Term
| What is a primary responsibility of the finance function regarding external stakeholders? |
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Definition
| The production of statutory financial statements. |
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Term
| Name a common administrative process within the finance function that is often outsourced. |
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Definition
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Term
| The communication principle of 'conciseness' requires that information should be _____. |
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Definition
| Brief and to the point while still being complete. |
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Term
| Why is the finance function's role in monitoring solvency critical to an organisation's survival? |
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Definition
| It ensures the business has enough liquid assets to meet its short-term debts as they fall due. |
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Term
| How does a primary source of information differ from a secondary source? |
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Definition
| A primary source is original, first-hand data, whereas a secondary source interprets or analyses primary data. |
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Term
| What is the main benefit of obtaining information from more than one source? |
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Definition
| It allows for the verification and cross-referencing of facts to ensure accuracy. |
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Term
| In a business context, when is it particularly important to take effective notes to document information? |
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Definition
| When dealing with customers or during one-to-one meetings with line managers. |
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Term
| What is a potential consequence of an employee posting inappropriate content on social media? |
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Definition
| Reputational damage to the business and potential disciplinary action for the employee. |
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Term
| When planning a workload, what two factors should be used to prioritise tasks? |
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Definition
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Term
| What is the impact on others if an individual fails to complete their specified tasks by a deadline? |
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Definition
| It can cause delays in other departments and prevent the organisation from meeting its overall objectives. |
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Term
| The characteristic of 'comparability' in useful information allows users to do what? |
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Definition
| Identify similarities and differences between different time periods or different entities. |
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Term
| Information is considered 'timely' if it is _____. |
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Definition
| Available to decision-makers while it still has the capacity to influence their decisions. |
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Term
| What is the purpose of a remittance advice produced by the finance function? |
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Definition
| To inform a supplier that their invoice has been paid. |
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Term
| Name one type of documentation received by the finance function that relates to inventory control. |
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Definition
| Purchase orders (or costing information). |
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Term
| Why is it important to restrict access to financial data using passwords and user permissions? |
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Definition
| To maintain the security, privacy, and confidentiality of sensitive information. |
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Term
| What process involves creating copies of data so that it may be restored in the event of a data loss incident? |
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Definition
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Term
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Definition
| Definition: The practice of protecting systems, networks, and programmes from digital attacks. |
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Term
| Under contract law, what is the effect of a 'counter-offer' on the original offer? |
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Definition
| The counter-offer terminates the original offer, meaning it can no longer be accepted. |
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Term
| What is the legal term for a contract that is valid until one party chooses to set it aside? |
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Definition
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Term
| The principle of 'transparency' in a tax system means that it should be clear how _____. |
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Definition
| The tax is calculated and what the collected revenue is used for. |
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Term
| How do changes in exchange rates affect a business's costs when trading internationally? |
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Definition
| A weakening of the domestic currency makes imports more expensive, increasing business costs. |
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Term
| Which stakeholders are considered 'internal' to a business regarding CSR responsibilities? |
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Definition
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Term
| The ethical principle of 'professional behaviour' requires accountants to avoid any action that may _____. |
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Definition
| Discredit the profession. |
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Term
| What is the 'public interest duty' of an accounting technician? |
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Definition
| The obligation to act in a way that serves the collective well-being of the community and the institutions it serves. |
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Term
| Which business entity type does not have a separate legal identity from its owners? |
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Definition
| Sole trader (or traditional partnership). |
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Term
| What is 'VAT' (Value Added Tax)? |
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Definition
| A consumption tax placed on a product whenever value is added at a stage of production and at final sale. |
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Term
| Which business document serves as a request for payment for goods or services supplied? |
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Definition
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Term
| What is the primary purpose of an 'annual return' (now often called a confirmation statement) for a company? |
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Definition
| To provide an updated snapshot of general company information, such as directors and registered office address. |
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Term
| The function responsible for managing an organisation's workforce and employee relations is _____. |
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Definition
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Term
| Which communication principle ensures that all necessary facts are included so the recipient can take appropriate action? |
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Definition
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Term
| In information management, what does the characteristic of 'reliability' imply? |
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Definition
| The information is accurate, free from bias, and can be depended upon by users. |
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Term
| What is the purpose of a 'credit note' produced by the finance function? |
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Definition
| To reduce the amount a customer owes, often due to returned goods or overcharges. |
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Term
| What is the primary risk of using 'invalid' sources of information? |
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Definition
| It can lead to incorrect conclusions, poor decision-making, and financial loss. |
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Term
| Why is 'consistency' important in financial reporting? |
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Definition
| It ensures that the same accounting treatments are applied from one period to the next, allowing for meaningful trend analysis. |
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Term
| Which document is received by the finance function to confirm the details of goods requested from a supplier? |
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Definition
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Term
| Name a specific action an accounting technician might take to behave ethically when faced with a conflict. |
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Definition
| Consulting with a professional body or seeking legal advice. |
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Term
| What is 'PAYE' (Pay As You Earn)? |
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Definition
| The system used by employers to deduct income tax and National Insurance from employees' pay before they receive it. |
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Term
| The term 'statutory books' refers to legal records that must be maintained by which type of business? |
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Definition
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Term
| What is the impact of government spending on the economy? |
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Definition
| Increased spending can stimulate economic growth and increase levels of employment. |
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Term
| How does 'uncertainty' in the global market affect business planning? |
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Definition
| It makes it difficult to predict future costs, revenues, and demand, requiring more robust risk management. |
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Term
| The 'convenience' principle of taxation suggests that taxes should be collected when _____. |
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Definition
| It is most easy for the taxpayer to pay (e.g., when they receive income). |
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Term
| What is a 'not-for-profit' organisation? |
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Definition
| An entity that uses its surplus revenues to achieve its goals rather than distributing them as profit to owners. |
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