Summary
Summary Financial management summer ch 1 - 2 - 3 - 7 - 9 - 10
- Course
- Institution
- Book
Summary of the book Accounting Principles from Johan Kloosterman in English. Chapter 1 - 2 - 3 - 7 - 9 - 10
[Show more]
Connected book
Book Title:
Author(s):
- Edition:
- ISBN:
- Edition:
More summaries for
-
Financial management CHAPTER 1 & 2 (first test) IBMS
-
Fm2 Chapter 3 Adjusting Entries
-
Financial management
3 reviews
By: amber_abdul • 3 year ago
By: audreygallakaje • 7 year ago
By: jschkx • 7 year ago
Dankje voor je feedback!:) en succes
By: karimafifi • 8 year ago
By: jschkx • 8 year ago
Thanks for your feedback! :)
Seller
Follow
jschkx
Reviews received
Content preview
Sunday 1 November yFinancial management I
Chapter 1
Accounting is an information system that measures, processes and communicates
financial information about a business.
Economic entity is an unit that exists independently (business, hospital, governmental
body). Accounting’s role of measuring, processing an communicating financial
information is usually divided into financial accounting and managerial accounting.
- Financial accounting external decision makers use it to evaluate how well the
business has achieved its goals. you call these reports financial statements.
- Managerial accounting internal decision
makers use it to get information about
operation, investing and financing activities.
The financial position of a company on a certain
date is shown on the main financial statement,
which is the balance sheet. It lists the
companies resources (assets) and the claims
against those recourses (liabilities and owner’s equity). It also shows the liquidity (the
ability to pay debts in the short term) of the company.
ECONOMIC RECOURCES = CREDITORS EQUITIES + OWNERS EQUITY
assets is everything the company owns and which has a monetary value (recourses of
the company)
ASSETS = LIABILITIES + OWNER’S EQUITY
liabilities is the money that the company will have to pay to outside parties (creditors)
Owner’s equity is what the owners could withdraw from the company if they wished to
do so.
OWNERS EQUITY = ASSETS - LIABILITIES
1
, Sunday 1 November y
revenues are recourses the business earns through
business transactions, such as sales of products or services
(revenues INCREASE the value of the owner’s equity)
expenses are recourses the company sacrifices in order to
generate revenues. (expenses DECREASE the value of the
owner’s equity)
The income statement of profit and loss account summarizes the revenues earned and
expenses incurred during a certain period.
profit = revenues - expenses —> If the profit is negative, it is called ‘loss’
Corporation - separate legal entity having it’s own rights, privileges and liabilities
separate from it’s owners.
Partnership - owned by 2 or more owners. The owners share the profits and losses
Sole proprietorship - a business with only one owner and is not incorporated. The
owner takes all the profits or losses and is liable for all its obligations.
GAAP Generally Accepted Accounting Principles: A world wide agreement on the
theory and practice of accounting at a particular time
FASB Financial Accounting Standards Board: they establish these GAAP’s
CPA Certified Public Accountant: a person which is not an employee of the
company being audited who audits the financial statements of many
companies of all sizes.
IFRS International Financial reporting standards: a common global language for
business affairs
IASB International Accounting Standards Board: Sets these international
accounting standards (IFRS)
PCAOB Public Company Accounting Oversight Board: a governmental body
created by sarbanes-Oxley Act. They have powers to determine the
standards that auditors must follow.
AICPA American Institute of Certified Public Accountants: Influences accounting
standards through member CPAs
SEC Securities and Exchange Commission: responsible for enforcing the
2
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller jschkx. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $6.97. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
49497 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now