100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
Summary Financial Accounting chapter 1 $3.22
Add to cart
Quickly navigate to
Preview
  2.  
  3. Avans Hogeschool (Avans)
  4.  
  5. Financial and Management accounting

Summary

Summary Financial Accounting chapter 1

3 reviews
 3 purchases
  • Course
  • Financial and Management accounting
  • Institution
  • Avans Hogeschool (Avans)
  • Book
  • Financial Accounting, Custom Edition

Financial Accounting summary of chapter 1, of the book Financial Accounting. For the 1st year of IBMS. Complete in English, following the guidelines of the manual descriptor.

Preview 2 out of 10  pages

Document information

  • Yes
  • April 9, 2016
  • 10
  • 2015/2016
  • Summary

Subjects

  • financial accounting

Connected book

book image

Book Title:

Author(s):

  • Edition:
  • ISBN:
  • Edition:

Written for

  • Avans Hogeschool (Avans)
  • Bedrijfseconomie / Finance & control
  • Financial and Management accounting
All documents for this subject (7)

3  reviews

review-writer-avatar

By: brianjoziasse • 7 year ago

review-writer-avatar

By: bellejacobs • 7 year ago

review-writer-avatar

By: nealkeesoudhof • 7 year ago

Seller

avatar-seller
rodneyackermans

Reviews received

Content preview

Summary of Financial Accounting Chapter 1

Learning Objective 1.1

Understanding the business

Creditors make money on the loans by charging interest.

Dividends  a portion of what a company earned in the form of cash payments.
(winstaandeel)



The Accounting System

Managers  Internal decision makers.

Stockholders and creditors  External decision makers.

All businesses must have an accounting system, that collects and processes
financial information about an organization’s business activities, and reports that
information to decision makers.

Business activities

- Financing activities  borrowing or paying back money to lenders and
receiving additional funds from stockholders or paying them dividends.

- Investing activities  buying or selling items such as plant and equipment
used in the production of beverages.

- Operating activities  the day-to-day process of purchasing raw tea and
other ingredients from suppliers, manufacturing beverages, delivering
them to customers, collecting cash from customers, and paying suppliers.



The four basic financial statements

1. Balance sheet  a company reports of the economic resources it owns
(assets, liabilities and stockholders’ equity) and the sources of financing
for those resources.
2. Income statement  a company reports its ability to sell goods for more
than their cost to produce and sell. (reports the revenue – expense)
3. Statement of stockholder’ equity  a company reports additional
contributions or payments to investors and the amount of income the
company reinvested for future growth. (reports the way net income and
distribution of dividends affected the financial position of the company)
4. Statement of cash flows  a company reports its ability to generate
cash and how it was used.

, The balance sheet

Purpose  to report the financial position(amount of assets, liabilities and
stockholder’ equity) of an accounting entity at a particular point in time.

Structure

1. Name of the entity
2. Title of the statement (balance sheet)
3. Specific date of the statement
4. Unit of measure

The balance sheet equation :

Assets = Liabilities + Stockholders’ equity

Assets  economic resources owned by a the entity

Current assets :all cash and other assets that a company expects to convert to
cash or sell or consume within 1 year

- Short term investments
- Accounts receivable
- Inventories (wholesalers and retailers  merchandise held for sale
and manufacturers  raw materials, goods in process of being
manufactured and finished products.
- Prepaid expense  advance payments to suppliers (rent, insurance etc.)

Non-current assets

1. Tangible assets: property, plant and equipment (fixed asset) land is also a
fixed asset but written down separately.
- The value of the fixed assets is declining in time due to depreciation.
2. Intangible assets  rights to future benefits (franchises, patents,
trademarks, copyrights

Depreciation = to allocate the assets original cost to the particular periods
that benefits of the use of the asset.

On the balance sheet  original price – cumulated depreciation = net book
value!!

Residual value  the amount a company expects to receive at the end of the
economic value

Depreciable amount  purchase price – residual value.

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

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

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

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 rodneyackermans. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $3.22. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

69411 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 15 years now

Start selling
$3.22  3x  sold
  • (3)
Add to cart
Added