ACCT1006 Notes TYPES OF FINANCIAL STATEMENTS
|
|
- Shannon Norman
- 6 years ago
- Views:
Transcription
1 ACCT1006 Notes TYPES OF FINANCIAL STATEMENTS - 4 financial statements o Statement of changes in equity Changes in OE s capital, reserves, and earnings How aspects in OE change over the period o Statement of profit/loss income minus expenses for particular period o Statement of financial position reports assets and claims on those assets
2 o Statement of Cash flows Cash in/out for a period
3
4
5 RATIO ANALYSIS - Ratio analysis expresses the relationship between selected items of financial statement data found in general purpose financial statements Profitability - Profitability ratios measure operating success of an entity for a given period of time. Two measures include return on assets and profit margin o Return on assets Indicates the amount of profit generated by each dollar invested in assets Return on assets =,-./ :69 e.g answer = 0.19 or 19% = firm generated 19 cents on every dollar invested in assets o Profit margin Measures the % of each dollar of sales that results in profit. Calculated by dividing profit/revenue Discount stores and like Coles are low-profit margin firms, where jewerly shops are high-profit margin firms Liquidity - Liquidity ratios measure the short-term ability of the entity to pay its maturing obligations and to meet unexpected needs for cash. Two measures include: working capital and current ratio o Current ratio Current assets/current liabilities Aka answer = 2.02% or $2.02; means, for every dollar of current liabilities, it has $2.02 of current assets o Working capital Measure of liquidity looking at difference between total current assets and current liabilities When figure is positive, firm is able to pay short-term creditors with existing current assets
6 Solvency - Solvency refers to entity s ability to meet its long-term financial obligations - Solvency ratios measure ability of business to survive long-term o Debt to total assets ratio Measures % of assets financed by creditors than shareholders; debt financing via creditors is riskier as they must be repaid at certain points Higher the % the more risker it is Calculated via total debt (current + non-current liabilities)/total assets Aka answer = 0.41; means 41cents of every dollar invested in assets has been provided by creditors o Interest cover ratio o Measures amount of profit available to cover interest expense o Ratio = EBIT/interest expense o Lower the profit; more risk to not pay lenders Relationship between amount financed by owners and the amount contributed by outside sources reflects degree of risk associated with business Benefits of financial ratios - Provide strength and weaknesses of a business based upon objective data - Condense accounting data into simplified ratios which can represent and provide information about key aspects of a business; which can aid both financial and management accounting o Financial accounting help ext. users better make choices Based on profitability Solvency o Management accounting Liquidity Inventory liquidity Limitations of ratios - They provide no causation factors. - Financial ratios are created using historical data, hence at the time of the creation of the ratios they may not be accurate - Nature of the business can limit the accuracy of the comparison of ratios between businesses - Ratios do not incorporate the cycle of the business, and this can distort the picture/health of a business o E.g a business is operating at an intro phase where earnings are not on par with operation costs DECISION MAKING PROCESS o Identify issue/decision to be made o Gather relevant info for the analysis o Identify the tool or technique that can provide the analysis of the issue so a decision may be made o Evaluate results of the analysis and make the decision
7 Lecture 2: - Steps in accounting cycle o Analyse transactions o Journalise transactions o Post transactions o Prepare a trial balance o Journalise and post adjusting entries o Adjusted trial balance o Prepare financial statements o Journalise and post-closing entries o Post-closing trials balance o Red coloured is during accounting period o Black is prepared at the end of the accounting period TYPES OF ACCOUNTING Cash based accounting - Accounting system which only recognises transactions when physical cash transfers occur, and hence only recognised revenue when cash is received, and expenses when cash is paid Accrual based accounting o All about recording transactions when rev. and expenses when they are earnt/incurred for specific periods, rather when physical cash transactions occur o Asset: resource controlled by an entity as a result of past events which future economic benefits are expected to flow to the entity Asset recognition: probable that future eco benefit will flow + value can be reliably measured o Revenue definition = revenue is increases in economic benefits arising in the course of ordinary activities of an entity. Other gains are not revenue as they do not arise in ordinary course of an entity Revenue recognition criteria A) probable that any future economic benefits associated with the revenue will flow to the entity (increase assets/decrease liabilities) and B) the revenue can be measured with reliability o Expenses definition = decrease in economic benefits during the accounting period in the form of costs that occur in the ordinary activities of the entity, such as cost of sales, wages. Expenses recognition criteria A) has arisen Outflow of future economic benefits (reduction assets/increase liabilities) associated with the expense is probable, and
8 B) The expense can be measured reliably Income definition CF defines income as an increase in economic benefits during the accounting period in the form of inflows or enhancements of assets or a decreases of liabilities that result in increases of equity, other than those relating to contributions from equity participants (shareholders) o Last line makes clear that cash from increase in equity contributions from shareholders does not count as revenue and thus income Recognition: has arisen and can be reliably measured ADJUSTING ENTRIES Why do we do adjusting entries? - We need adjusting entries to ensure that certain assets/liabilities and accounts are valued accurately to ensure proper information is published o Also to ensure asset, liability, equity, expense accounts are most updated o There are certain transactions which we don t record on an daily basis wages, which can then affect the totals and the accuracy of our financial statements Types of adjusting entries - Prepayments o Prepaid assets Original: dr rent; cr cash Adjusted: dr rent expense, cr asset o Prepaid expenses Original transaction Dr expense Cr cash Adjusted entry Dr asset left Cr expense left o What happens when you completely use the asset? Require another entry? 3 rd entry? o Unearned revenue Dr; cash; cr unearned revenue Dr unearned revenue, cr sales - Accruals o Accrued revenue Acc rec; cr sales Dr cash; cr accounts recievable
9 o Accrued expenses dr expense cr payabke dr payable expense cr cash What s the difference between prepayment and an accrual? - Prepayment when firm has prepaid for an expense, or an asset, or when an entity has earnt revenue before providing the service. Whereas, is when cash is received or paid after a service has been performed or consumed Preparing financial statements - Statement of profit or loss is prepared from the revenue and expense accounts - Current period profit or loss and \s paid are transferred to retained earnings account (part of statement of changes in equity) o Retained earnings = accumulated profit dividends - Statement of financial position prepared from asset, liability, equity and balance of retained earnings account CLOSING THE ACCOUNTS What are closing entries - Revenues, dividends, and expenses are related to only a given accounting period, and hence are considered temporary accounts - Permanent accounts are carried forward to the future accounting periods o E.g assets, liabilities, equity - At end of accounting period, temporary accounting balances are transferred to the permanent equity account retained earnings or capital through prep of closing entries - Closing entries formally recognise in the ledger the transfer of profit or loss and dividends to retained earnings - In addition to updating retained earnings account, closing entries produce a nil balance in each temporary account so that they are ready to be used for next accounting periods How to physically close the books (posting) 1. To make an account balance zil, we need to credit each expense account and debit each revenue account on T-accounts
10 a. Normal revenue accounts will have a cr balance, hence need to debit b. Normal expense accounts will have a dr balance, so need to credit 2. transfer each credit/debited revenue and expense to the profit or loss summary t- account. a. On t-accounts, you debit/credit the opposite side i. Do we need to say closing balance = 0 on t-accounts? 3. On the profit/loss t-account summary, when you have closed all expenses and revenue there will be a final figure representing profit or loss 4. Close the profit/loss T-account, and transfer the profit/loss value to the retained earnings account a. Incorporate the dividend and following this means the accounts are closed i. Remember dividend only incorporated at retained earnings account; as they are a distribution of capital, and not an expense 5. You need to similarly journalise the closing entries for expenses/revenue and profit/loss summary, and dividends a. You simply dr/cr as in line with the t-account, and the opposite dr/cr is profit or loss summary b. As you can see only need to journalise once for expenses, and once for revenue c. you must journalise profit/loss summary; with dr profit/loss, and cr retained earnings d. and must journalise closing of dividend accounts; you dr retained earnings as its taking away from its value 6. Prepare a post-closing trial balance; which is a list of all permanent accounts and their balances after closing entries are journalised and posted a. Purpose of post-closing trial balance is to prove equality of the permanent accounts that are carried forward to next accounting period b. Will only have permanent accounts on them; whole point is to ensure dr = cr
GAAP AND REVISION. DEFINITION OF ELEMENTS OF FINANCIAL STATEMENTS Revision concepts
GAAP AND REVISION INTRODUCE THE GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) Accounting standards The Conceptual Framework Accounting concepts & principles CONCEPTUAL FRAMEWORK Describes objective of
More informationACC100 Introduction to Accounting
ACC100 Introduction to Accounting Week 6 Closing entries and preparing financial statements Chapter 4 (p148-162); and Chapter 5 Completing the accounting cycle closing and reversing entries. Study Group
More informationCompleting the accounting cycle
Chapter 5 Completing the accounting cycle PowerPoint presentation by Anne Abraham University of Wollongong 2009 John Wiley & Sons Australia, Ltd Learning Objectives 1. Understand all the steps in the complete
More informationCompleting the accounting cycle
Chapter 5 Completing the accounting cycle PowerPoint presentation by Anne Abraham University of Wollongong 2009 John Wiley & Sons Australia, Ltd THE COMPLETE ACCOUNTING CYCLE 1. Recognise and record transactions
More informationWEEK 7 to 12: FINANCIAL ACCOUNTING FOR BUSINESS Accounting Cycle ACCOUNTING CYCLE STEP 1: RECOGNISE & RECORD TRANSACTIONS
WEEK 7 to 12: FINANCIAL ACCOUNTING FOR BUSINESS Accounting Cycle ACCOUNTING CYCLE STEP 1: RECOGNISE & RECORD TRANSACTIONS EXTERNAL TRANSACTIONS INTERNAL TRANSACTIONS NON-TRANSACTIONAL EVENTS Involves an
More informationWeek 3. Topic 3 Chapter 3. ACT102 Introduction to Accounting. Accounting for end of financial period adjustments 21/02/2018
ACT102 Introduction to Accounting Week 3 Accounting for end of financial period adjustments Topic 3 Chapter 3 2 RECAP Topic 2: Recording Business Transactions The accounting equation must always balance
More informationBUSS 1030 ACCOUNTING, BUSINESS AND SOCIETY NOTES
WEEK 1 BUSS 1030 ACCOUNTING, BUSINESS AND SOCIETY NOTES Accounting information system measuring business activity, processes data into reports and communicates results to decision makers (ethics important
More informationIntroduction to Financial Accounting
Introduction to Financial Accounting Introduction to Accounting Accounting is a process that identifies, records and communicates information to interested users. Who Uses Accounting Data? Internal Users
More informationChapter 8. Recording Adjusting and Closing Entries
Chapter 8 Recording Adjusting and Closing Entries Adjusting Entries Adjusting Entries - journal entries recorded to update general ledger accounts at the end of a fiscal period (Supplies & Prepaid Insurance).
More informationPrinciples of Accounting II
Principles of Accounting II Lecture 1 Adjusting the Accounts Basic Accounting Equation What the business owns = What the business owes Assets = Liabilities (owed to creditors)+ Owners Equity (residual
More informationSection A: Multiple-Choice Questions (2 marks each; Total 30 marks)
Name: Student ID: Section A: Multiple-Choice Questions (2 marks each; Total 30 marks) Choose the one best answer. 1. The accounting process involves all of the following except ( d ) a. identifying economic
More information- A resource - Controlled by the entity - As a result of a past event - From economic benefits are expected to flow to the entity.
Elements and recognition criteria 1. Identify the definition for each of these elements: a. Assets b. Liabilities c. Equity d. Income e. Expenses - A resource - Controlled by the entity - As a result of
More informationAccounting Basics Introduction To Financial Accounting
Accounting Basics Introduction To Financial Accounting ILLUSTRATION 1-5 BASIC ACCOUNTING EQUATION The Basic Accounting Equation Assets = Liabilities + Owner s Equity ASSETS AS A BUILDING BLOCK Assets are
More informationChapter 6 Statement of Cash Flows
Chapter 6 Statement of Cash Flows The Statement of Cash Flows describes the cash inflows and outflows for the firm based upon three categories of activities. Operating Activities: Generally include transactions
More informationSOLUTIONS TO TEST I FALL 1996 PMBA
SOLUTIONS TO TEST I FALL 1996 PMBA 1. B A decrease in the items on the left is not balanced by an increase in the items on the right. For a., an increase on the left and right will balance out. For c.,
More informationLearning Outcomes. The Basic Accounting Cycle
Chapter 2: Review of the Accounting Process Part 3: Accounting Cycle with Emphasis on Year End Activities Intermediate Accounting 1 Dr. Chula King Learning Outcomes After completing this part, you should
More informationLook at Chapter 2 of Horngren. Make sure that you understand and can describe the following:
Week 1 Revise the introduction to Financial Accounting from CMA100, Chapters 1 and 2, Horngren and then look at Week 1 s topic The Adjusting Process, Chapter 3. Look at Chapter 1 of Horngren. Make sure
More informationChapter 4 Question Review 1
Chapter 4 Question Review 1 Chapter 4 Questions Multiple Choice 1. The final step in the accounting cycle is to prepare: a. closing entries. b. financial statements. c. a post-closing trial balance. d.
More informationDisclaimer: This resource package is for studying purposes only EDUCATON
Disclaimer: This resource package is for studying purposes only EDUCATON Chapter 1 Objective of Accounting: 1. To identify and measure activities of a business entity in order to evaluate its performance
More information2/10/2009. The accounting ACCOUNTING TRANSACTIONS AND EVENTS. Analysing transactions. Chapter 2
Chapter 2 The accounting information system PowerPoint presentation by Anne Abraham University of Wollongong 2009 John Wiley & Sons Australia, Ltd ACCOUNTING TRANSACTIONS AND EVENTS Transactions are external
More informationACCOUNTING SEMESTER 1. Final Exam Review
ACCOUNTING SEMESTER 1 Final Exam Review 1 ACCOUNTING SEMESTER 1 30 T & F 70 MC Questions with pictures 5-Worksheet 6-Journals 3-Cash Payment Journal 2 CHAPTER 1 What is the accounting equation? Assets=Liabilities
More informationDebit and Credit Rules Module 2 part I. T- Accounts Assets = Liabilities + OE. T- Accounts: Basic Patterns A = L + OE
Debit and Credit Rules Module 2 part I Introducing T accounts Examining Account Patterns: the Increase and Decreases What s the Mystery? Debits and Credits 9/5/2005 Dr. Kathy Wigal 1 T- Accounts Assets
More informationVISUAL #16-1 CLASSIFYING ACTIVITIES IN THE STATEMENT OF CASH FLOWS OPERATING ACTIVITIES INVESTING ACTIVITIES FINANCING ACTIVITIES
VISUAL #16-1 CLASSIFYING ACTIVITIES IN THE STATEMENT OF CASH FLOWS OPERATING ACTIVITIES Cash inflows from Cash outflows to Customers for cash sales Collections on credit sales Borrowers for interest Dividends
More informationFull file at
CHAPTER 2 QUESTIONS 1. The accounting system generates a variety of reports for use by various decision makers. Among the most common are generalpurpose financial statements, management reports, tax returns,
More informationProf Albrecht s Notes Example of Complete Accounting Cycle Intermediate Accounting 1
Prof Albrecht s Notes Example of Complete Accounting Cycle Intermediate Accounting 1 In this chapter of notes I ll provide a complete example of the accounting cycle. The order of the tasks to complete
More informationAim: to use a general journal entry from the previous lecture (week 2) and post to a T account.
Reconstruction of accounts and error correction 1/07/2017 3:53 PM Lecture T accounting (Part 1) The video lecture for this topic is in two parts, which together look at steps 3-5 of the accounting, cycle
More informationLesson 4. Lesson 4. Cash. Beg. Balance End. Balance. 30 Liability. Accounting Cycle Part Stephen's Sweet Shop Trial Balance
Lesson 4 Financial Accounting (Information useful to investors and creditors.) The primary tool for investors and creditors are the financial statements to be prepared in accordance with generally accepted
More informationCHAPTER 12. The statement of cash flows categorizes cash receipts and cash payments as operating, investing, and financing activities.
CHAPTER 12 Purpose of the Statement of Cash Flows The statement of cash flows is considered a major financial statement, as are the income statement, balance sheet, and statement of stockholders' equity.
More informationChapter 3. Learning Objectives. Distinguish accrual accounting from cash-basis accounting. Objective 1. The Adjusting Process
PowerPoint to accompany Chapter 3 The Adjusting Process Learning Objectives 1. Distinguish accrual accounting from cash-basis accounting. 2. Make adjusting entries at the end of the accounting period.
More informationUIL 2017 Capital Conference UIL Accounting Accounting Accruals & Deferrals: Timing is Everything!
UIL 2017 Capital Conference UIL Accounting Accounting Accruals & Deferrals: Timing is Everything! What We Will Do in This Session: 1. Gauge your level of confidence regarding this topic area 2. Review
More informationAdjusting the Accounts
HOSP 1860 (Financial Acct) Learning Centre Adjusting the Accounts Anytime we prepare financial statements or reach the end of an accounting period, there are account adjustments that need to be made to
More informationChapter 6 The annual report and accounts. The closure of the accounting cycle and Accounting information disclosed to the public
Chapter 6 The annual report and accounts The closure of the accounting cycle and Accounting information disclosed to the public 1 Six steps in the accounting cycle 1. Analyze transactions from the source
More informationCHAPTER 12. Statement of Cash Flows. Study Objectives
CHAPTER 12 Statement of Cash Flows Study Objectives Indicate the primary purpose of the statement of cash flows. Distinguish among operating, investing, and financing activities. Explain the impact of
More informationCHAPTER 3 Selected Solutions. The Accounting Information System. Brief Topics Questions Exercises Exercises Problems
CHAPTER 3 Selected Solutions The Accounting Information System ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Brief Topics Questions Exercises Exercises Problems 1. Transaction identification. 1, 2, 3, 5,
More informationIntermediate Accounting IFRS Edition Kieso, Weygandt, and Warfield. Slide 3-2
3-1 C H A P T E R 3 THE ACCOUNTING INFORMATION SYSTEM Intermediate Accounting IFRS Edition Kieso, Weygandt, and Warfield 3-2 Learning Objectives 1. Understand basic accounting terminology. 2. Explain double-entry
More informationCHAPTER4. The Recording Process. PreviewofCHAPTER4. Using a Worksheet. Steps in Preparing a Worksheet
CHAPTER4 The Recording Process 4-1 4-2 PreviewofCHAPTER4 Using a Worksheet Steps in Preparing a Worksheet Multiple-column form used in preparing financial statements. Not a permanent accounting record.
More informationPROBLEM 3-2B. (a) J1 Date Account Titles Ref. Debit Credit May 31 Insurance Expense Prepaid Insurance...
PROBLEM 3-2B (a) J1 Date Account Titles Ref. Debit Credit May 31 Insurance Expense... 722 190 Prepaid Insurance... ($2,280 X 1/12) 130 190 31 Supplies Expense... Supplies ($2,200 $)... 631 126 1,450 1,450
More informationFAQ: Statement of Cash Flows
Question 1: What sources are used when the statement of cash flows is being prepared, and what information does each source provide? Answer 1: The statement of cash flows is prepared differently from the
More informationProf Albrecht s Notes Introduction to the Accounting Cycle Intermediate Accounting 1
Prof Albrecht s Notes Introduction to the Accounting Cycle Intermediate Accounting 1 The accounting cycle is accounting process that extends from the very start of an accounting period to the absolute
More informationCHAPTER 2 QUESTIONS. revenue, and expense accounts of the
CHAPTER 2 QUESTIONS 1. The accounting system generates a variety of reports for use by various decision makers. Among the most common are generalpurpose financial statements, management reports, tax returns,
More informationLIVE: FINANCIAL STATEMENTS (SOLE TRADER) 10 NOVEMBER 2014
LIVE: FINANCIAL STATEMENTS (SOLE TRADER) 10 NOVEMBER 2014 In this lesson we: Lesson Description Understand how to do year-end adjustments with particular reference to the income statement Understand the
More informationBUS210. Chapter 4 Sessions 4, 5, 6, & 7 Mechanics of Financial Information
BUS210 Chapter 4 Sessions 4, 5, 6, & 7 Mechanics of Financial Information Connecting the Accounting Equation with Transactions: Journal Entries, T Accounts E4-9 Prepare journal entries for each cash transaction
More informationAdjustments, Financial Statements and the Quality of Earnings
Adjustments, Financial Statements and the Quality of Earnings Chapter 4 Accounting Cycle 4-2 1 Unadjusted Trial Balance Listing of all the balance sheet and income statement accounts, usually in financial
More informationChapter 5 Accrual Adjustments and Financial Statement Preparation. Revenue recognition Matching expenses to revenues Expenses related to periods
Chapter 5 Accrual Adjustments and Financial Statement Preparation Revenue recognition Matching expenses to revenues Expenses related to periods 1 The Measurement of Income major function of accounting
More informationExam Revision Notes. communicating the economic transactions and events of a business operation.!
Topic 2: Regulation - Accounting is a process of identifying, measuring (can be estimating), recording and communicating the economic transactions and events of a business operation. Conceptual Framework:
More informationACCT 101 Statement of Cash Flows Lecture Notes Chapter 12 Prof. Johnson. The statement of cash flows is a required component of financial statements.
ACCT 101 Statement of Cash Flows Lecture Notes Chapter 12 Prof. Johnson The statement of cash flows is a required component of financial statements. BASICS OF CASH FLOW REPORTING Purpose of the Statement
More informationWeek 2, Completing the accounting cycle. 1/5
Week 2 Horngren, Chapter 4, including the appendix, Completing the accounting cycle. In this chapter we will be using the full accounting worksheet to complete the accounting cycle. The learning objectives
More informationACC100 Introduction to Accounting
ACC100 Introduction to Accounting Week 5 Adjusting Entries and the Trial Balance Chapter 4 Adjusting entries Study Group Australia Pty Limited, SGA1286-F2/10/12 2 Learning Outcomes On completion of this
More informationAnalyzing Transactions
Question 1: What is the relationship between a transaction, a journal, a ledger, and a chart of accounts? A transaction is the record used to reflect the activity of a business. These transactions are
More informationChapter 5 Accrual Adjustments and Financial Statement Preparation. Revenue recognition Matching expenses to revenues Expenses related to periods
Chapter 5 Accrual Adjustments and Financial Statement Preparation Revenue recognition Matching expenses to revenues Expenses related to periods 1 The Measurement of Income major function of accounting
More informationChapter 3. Deferred Taxation
hapter 3 Deferred Taxation Reference: IAS 12 and SI 21 ontents: Page 1. Definitions 90 2. Normal tax and deferred tax 91 2.1 urrent tax versus deferred tax 91 2.1.1 A deferred tax asset 91 2.1.2 A deferred
More informationSOLUTIONS TO END-OF-CHAPTER QUESTIONS CHAPTER 6
SOLUTIONS TO END-OF-CHAPTER QUESTIONS CHAPTER 6 DEVELOP YOUR UNDERSTANDING Question 6.1 Abi: statement of cash flows for the year ended 31 August 2018 using the direct method Cash flows from operating
More informationEliminating parent s investment against equity acquired in subsidiary
1. Consolidated worksheet adjusting entries Eliminating parent s investment against equity acquired in subsidiary Dr Subsidiary s total equity balance at acquisition date Cr Parent s investment in subsidiary
More informationDisclaimer. Uncovered transactions NO FEC taken out. Important definitions. Initial measurement
Learning unit 7 Effects of changes in foreign exchange rates Disclaimer The information contained in the summary is to highlight important aspects in applying the principles of the applicable statements.
More informationBusiness Background Management is responsible for preparing...
Business Background Management is responsible for preparing... Financial Statements High Quality = Relevance + Reliability... Are useful to investors and creditors. Business Background Revenues are recorded
More informationIntroduction to Financial Accounting & Key Financial Statements (Chapter 1)
Introduction to Financial Accounting & Key Financial Statements (Chapter 1) 14/10/2017 5:29:00 pm Accounting = process of identifying, measuring and communicating economic information to assist users in
More informationUnderstanding Reversal Entries
Understanding Reversal Entries Kalaithasan Kuppusamy Reversal entries, which are done on the first day of a new accounting period, are the complete opposite of adjustments entries done at the end of a
More informationFinancial Statements and Closing Entries for a Merchandising Business
Ch.10 Financial Statements and Closing Entries for a Merchandising Business o Prepare financial statements for a merchandising business o Journalize adjusting and closing entries for a merchandising business
More informationAccounting Cycle Review Problem. Michelle Clark. Accounting 1110 Section 401. Fall 2014
Accounting Cycle Review Problem Michelle Clark Accounting 1110 Section 401 Fall 2014 General Journal DATE ACCOUNT TITLES AND EXPLANATION DEBIT CREDIT Record Transactions, Adjusting Entries, Closing Entries
More informationCHAPTER 2: FINANCIAL REPORTING MECHANISMS
Department of Management and Law CHAPTER 2: FINANCIAL REPORTING MECHANISMS Prof. Sandro Brunelli, Ph.D. brunelli@economia.uniroma2.it BUSINESS ACTIVITIES AND FINANCIAL STATEMENT ELEMENTS Business Activities
More information20-Dec-10. Elements of financial statements. What are some of the current projects before IFRIC? Chapter 3 Company Operations. Prepared by Emma Holmes
Chapter 3 Company Operations Prepared by Emma Holmes Elements of financial statements The Framework contains the definition and recognition criteria for the 5 main elements in the financial statements
More informationFAQ: Financial Statements
Question 1: What is the correct order in which financial reports must be created? Answer 1: The income statement is created first, then the owners' equity statement, and finally the balance sheet. This
More informationdownload from https://testbankgo.eu/p/
CHAPTER 3 ADJUSTING THE ACCOUNTS SUMMARY OF QUESTIONS BY OBJECTIVES AND BLOOM S TAXONOMY Item SO BT Item SO BT Item SO BT Item SO BT Item SO BT True-False Statements 1. 1 C 9. 2 C 17. 5 C 25. 5 K 33. 3
More informationWeek four. Debit (Dr) side. Lectures Page 1. Monday, 22 August 2016
Week four Monday, 22 August 1:22 PM What is a general ledger? General ledger- summary of each account A general ledger contains all the assets, liabilities and equity accounts, Collection of all the individual
More informationMARK SCHEME for the October/November 2010 question paper for the guidance of teachers 0452 ACCOUNTING. 0452/22 Paper 2, maximum raw mark 120
UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS International General Certificate of Secondary Education MARK SCHEME for the October/November 2010 question paper for the guidance of teachers 0452 ACCOUNTING
More informationChapter 9 Recording Adjusting and Closing Entries
Chapter 9 Recording Adjusting and Closing Entries Fiscal Period Length of time for which a business reports and summarizes financial information Concept: Accounting Period Cycle: reporting changes in financial
More informationCurrent tax liability in four cases
Question 6.2 Current tax liability in four cases The chief financial officer of Lost Weekend Ltd has asked you to calculate the taxable income and prepare the journal entry for the current tax liability
More informationACC 211/212: Double Entry Logs
ACC 211/212: Double Entry Logs Journal Entries: o Credits are always indented (account name and value). o The sum of debits will always equal the sum of credits. o The month name is required only for the
More informationChapter 4. The Accounting Cycle Adjusting Entries Closing Process Net Profit Margin Ratio
Chapter 4 The Accounting Cycle Adjusting Entries Closing Process Net Profit Margin Ratio The Accounting Cycle Accounting cycle process Records individual transactions Produces the four basic financial
More informationUNIT 3 : TRIAL BALANCE
ACCOUNTING PROCESS 2.41 UNIT 3 : TRIAL BALANCE LEARNING OUTCOMES After studying this unit, you will be able to : Learn the technique of taking balances from ledger accounts to prepare trial balance. Understand
More informationFinal accounts for sole traders and partnerships
Osborne Books Tutor Zone Final accounts for sole traders and partnerships Practice assessment 2 Osborne Books Limited, 2013 2 f i n a l a c c o u n t s f o r s o l e t r a d e r s a n d p a r t n e r s
More informationACCT 100 Intro to Acct. Chapter 12: Accruals, Deferrals, and the Worksheet Johnson
ACCT 100 Intro to Acct. Chapter 12: Accruals, Deferrals, and the Worksheet Johnson Where we have been: We have learned a lot about the selling and buying functions of merchandiser. You have learned many
More informationChapter 12 - Reporting and Analyzing Cash Flows. Chapter Outline
I. Basics of Cash Flow Reporting A. Purpose of the Statement of Cash Flows To report cash receipts (inflows) and cash payments (outflows) during a period. This report classifies cash flows into operating,
More informationModule 4. Table of Contents
Copyright Notice. Each module of the course manual may be viewed online, saved to disk, or printed (each is composed of 10 to 15 printed pages of text) by students enrolled in the author s accounting course
More informationFINANCIAL STATEMENTS OF TRADING COMPANIES
FINANCIAL STATEMENTS OF TRADING COMPANIES QUESTION ONE The trial balance of Beta Limited as at 31 st December, 2016 is as follows: Dr Cr GH GH Sales and Purchases 20,000 50,000 Inventory 8,000 Distribution
More informationThe Adjustment Process and Financial Statements Irwin/McGraw-Hill
Chapter 4 The Adjustment Process and Financial Statements Business Background: The Accounting Cycle Phase 1: During the Accounting Period. Start of the Accounting Period! Perform transaction analysis.!
More informationPrepare the necessary journal entries to correct the above. Narrations are not required.
Correction of errors HKDSE (2017, 5) (Correction of errors) ABC Limited drafted a trial balance as at 31 December 2016, before the preparation of the closing entries. As the trial balance did not agree,
More informationMIDTERM EXAMINATION Fall 2009 FIN621- Financial Statement Analysis (Session - 4)
MIDTERM EXAMINATION Fall 2009 FIN621- Financial Statement Analysis (Session - 4) Time: 60 min Marks: 50 Asslam O Alikum FIN621- Financial Statement Analysis 2009 (Session 4) solved by Afaaq n Shani Bhai
More informationACCOUNTANCY. Part B. Q17. State the significance of Analysis of Financial Statements to the Lenders. (1 mark)
ACCOUNTANCY [Time allowed: 3 hours] [Maximum marks:80] General Instructions: (i) This question paper contains three parts A, B and C. (ii) Part A is compulsory for all candidates. (iii) Candidates can
More informationChapter 12. The statement of cash flows categorizes cash receipts and cash payments as operating, investing, and financing activities.
1 Chapter 12 2 The statement of cash flows is a major financial statement as are the income statement, balance sheet, and statement of stockholders' equity. The statement of cash flows is required whenever
More informationTOPIC 8 - IAS 12 Income Taxes
TOPIC 8 - IAS 12 Income Taxes IAS 12 prescribes the accounting treatment for income taxes. What is Current Tax? Current Tax is the amount of income taxes payable in respect of the taxable profit for a
More informationChapter 2 Review of the Accounting Process
Chapter 2 Review of the Accounting Process AACSB assurance of learning standards in accounting and business education require documentation of outcomes assessment. Although schools, departments, and faculty
More informationAchievement Standard (Accounting 3.3) requires students to process, explain, and report the financial information for companies.
Achievement Standard 91406 Demonstrate understanding of company financial statement preparation ACCOUNTING Externally assessed 5 credits Achievement Standard 91406 (Accounting ) requires students to process,
More informationAccounting and Financial Management 1A
Accounting and Financial Management 1A LECTURE 1 NOTES Accounting definition: Way in which organisations provide measure of financial position/performance. Conveys economic info. to decision makers > economic
More information4. A They increase retained earnings in the shareholders equity section. This is why we always credit revenues.
www.liontutors.com ACCTG 211 Exam 1 Practice Exam Solutions 1. B Historical cost 2. (1) Analyze transactions and create journal entries, (2) poster journal entries to ledger accounts, (3) Balance ledger
More informationUnappropriated retained earnings (accumulated deficit) Total unappropriated retained earnings (accumulated deficit) 676, ,797 Total retained ear
Financial Statement Balance Sheet Accounting Title 2014/12/31 2013/12/31 Balance Sheet Assets Current assets Cash and cash equivalents Total cash and cash equivalents 1,183,185 1,177,682 Current bond investment
More informationACCT Intermediate Financial Accounting
ACCT 20002 Intermediate Financial Accounting LECTURE 1 INTRODUCTION EXAMPLES OF ACCOUNTING STANDARD RECORDING Example Artwork of sentimental value Photographs of sentimental value Obsolete plant now retired
More informationCHAPTER 4 EXERCISES: SET B. E4-1B The trial balance columns of the worksheet for Lamar Company at June 30, 2017, are as follows.
CHAPTER 4 EXERCISES: SET B E4-1B The trial balance columns of the worksheet for Lamar Company at June 30, 2017, are as follows. Complete the worksheet. LAMAR COMPANY Worksheet for the Month Ended June
More informationCPT Chapter2, Unit-3 Fundamentals of Accountancy CA.S.K.Chhabra
CPT Chapter2, Unit-3 Fundamentals of Accountancy CA.S.K.Chhabra What is a Trial balance? It is a Statement prepared to ensure the arithmetical accuracy of all the accounts before the preparation of the
More informationBank Accounting Essentials
Your State Association Presents Bank Accounting Essentials Program Materials Use this document to follow along with the webinar presentation. Please test your system before the broadcast. Be sure to print
More informationChapter 3 The Adjusting Process
Instant download and all chapters Solution Manual Horngren s Financial Managerial Accounting 4th Edition Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura https://testbankdata.com/download/solution-manual-horngrens-financialmanagerial-accounting-4th-edition-tracie-l-nobles-brenda-l-mattison-ella-maematsumura/
More information(Accrual and Prepayment)
Accrual and Prepayment Longman Question 13 The following balances were extracted from the ledgers of Mr Ko at 31 March 2014: $ Telephone 12,355 Dr Rent and rates 55,000 Dr Loan to Bob 450,000 Dr Rental
More informationPresented by: Meredith Mostochuk, CBA
Presented by: Meredith Mostochuk, CBA Types of Businesses Definition of a Business: An organization in which goods and services are exchanged for one another, or for money, on the basis of their perceived
More informationCOMPLETING THE ACCOUNTING CYCLE
Chapter 04 COMPLETING THE ACCOUNTING CYCLE PowerPoint Authors: Susan Coomer Galbreath, Ph.D., CPA Charles W. Caldwell, D.B.A., CMA Jon A. Booker, Ph.D., CPA, CIA Cynthia J. Rooney, Ph.D., CPA McGraw-Hill/Irwin
More informationModule 3 Exhibits and Key Terms. Table of Contents. 1 Principles of Accounting Adjustments for Financial Reporting
Table of Contents Exhibit 14: Cash basis and accrual basis of accounting compared... 2 Exhibit 15: Summary fiscal year ending by Month... 2 Exhibit 16: Two classes and four types of adjusting entries...
More informationImportant Terminology
Important Terminology Recognition When we "recognize" a revenue or expense, it means that we record the amount in our general ledger and the amount is included in our income statement. Deferral When we
More information2017 VCE Accounting written examination report
VCE Accounting written examination report General comments The VCE Accounting examination consisted of eight questions in total, with most questions containing subparts. A feature of this examination was
More informationENTRIES MADE PRIOR TO CLOSING
ENTRIES MADE PRIOR TO CLOSING There are a few entries that should be done before the end of the fiscal year that will make the closing process a little smoother. Included are some examples for your reference.
More informationManagement & Principles of Accounting Date: 08/11/2017 Recording transactions in the journal book and in the ledger book
Management & Principles of Accounting Date: 08/11/2017 Recording transactions in the journal book and in the ledger book Patrizia Tettamanzi Sophie Goodman Source: Kimmel/Weygandt/Kieso Financial Accounting
More informationSole Trader Final Accounts
All questions copyright of Cambridge International Examinations 1 Sole Trader Final Accounts All questions copyright of Cambridge International Examinations 2 2 1 Amah Retto's ledger accounts for the year
More information