Note of ACCT 1501 Accounting and financial managing 1A:
Introduction to Financial Accounting & Crucial Financial Claims: * Accounting: the process of discovering, measuring, documenting and interacting economic information to assist users to make decisions * There are specific business language used in accounting: 1, Grammar
2, Vocabulary: every accounting terminology has its specific that means 3, Practice: all is dependent on accounting requirements, disciplines and assumptions Through understanding the organization language, we could understand the accounting cycle.
a couple of main label of Accounting System:
5. 1, economic Accounting system: Periodic monetary statements and related disclosures: mainly assists external decision makers (e. g.: investors, creditors, lenders, government, etc . ) 2. 2, Managerial Accounting Program: Detailed ideas and continuous performance studies: mainly for Interior decision manufacturers (managers throughout the organization)
5. It targets the supply of information to users exterior to the enterprises. * The focus is in reporting budget and economical performance: Financial performance: profitability, sales overall performance etc (mainly income statement) Financial position: liquidity, solvency and so on (mainly balance sheet)
2. focuses on the provision info to users within the businesses (to assist in operational preparing and control decisions)
The monetary consequences can influence organization through employing accounting to convey economic info to decision makers: (related to monetary reporting) 5. Recently, you will discover different improvements and creation influencing this area * For instance , economic outcomes in equity market:
2. Decision makers' (investor/owner) decision is based on what value they are really willing to possibly buy or sell stocks in the market.
Reason why enterprises need to disclose their very own financial assertions: * Both sides have reasons:
For interior: disclosure helps you to reduce fewer concern by external and establish better public picture For external: To ensure to secure their capital that may be related to the enterprises or screen the corporations. * To analyze the accounting information, we should look at the statement of companies and their competitors in order to compare and evaluate.
5. Glossy mag that contains a lot of descriptive information about the organization and the general-purpose financial claims. * Persons can get the annual record from the companies' websites.
several types of financial statements:
2. Balance sheet
* Income affirmation
* Assertion of cash goes
Balance sheet: shows financial position as of a certain point in time Main economic information: assets and statements
-Current assets: converted into cash in 12 months or functioning cycle, no matter which is for a longer time: cash, bank account receivables, inventories, short-term purchases - noncurrent assets: Long term investment, home, plant& tools, intangible assets
Liabilities: Current and non-current
5. Share capital
* Maintained profits
*Assets= liabilities & shareholders' collateral
Income statement: showing the results of operation during the period Exhibiting profitability
5. sales earnings
* assistance revenue, service fees earned
* Useful resource or solutions used to create revenue
* Operating and nonoperating expenses
Revenue-operating expenses= operating cash flow
Operating income-non-operating income and expenses= net profit/losses
Cash-flow statement: exhibiting receipt and payment of cash
* there are sources for every useful resource in all transaction. * Resource=source
* The double-entry accounting: the method of record-keeping that lets you track where the money comes from and exactly where it...