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Accounting aantekeningen college 22/23

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Accounting aantekeningen college 22/23

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  • October 2, 2023
  • 16
  • 2022/2023
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Accounting aantekeningen colleges
College 1 – 25 oktober 2022 bookkeeping
Bookkeeping
Fundamental principles of bookkeeping:
- The company is assumed to be an independent economic entity separate from its
owners
- The company can therefore owe money to its owners
- This makes “double entry bookkeeping” possible

Types of general ledger accounts:
Assets (activa) = what the company owns (benefits in the future that can be measured
reliably)

Liabilities (vreemd vermogen/schulden) = what the company owes to other than the owners
of the company (based on contracts)

Equity (eigen vermogen/schulden) = what the company owes to the owners, including:

 Geïnvesteerd geld

 Ingehouden winst (winst
uit het verleden)
 Overige reserves


Revenues (verkoop) = inceases in owners’ wealth due to sales
Expenses (kosten) = decreases in owners’ wealth due to use of resources (inventory, labour,
machines, financial resources)

Accounting equations:
 Assets = liabilities + equity  debit = credit

 Equity = assets – liabilities (eigenaren krijgen wat overblijft)

 Equity end of year = equity start of year + revenues – expensen +/- other changes

 Equity = share capital + retained earnings + other reserves

Debit  links Credit  rechts

,Financial Statements (jaarrekeningen)
Financial reporting environment:
Accounting standards:
- Generally accepted accounting principles
o Many countries have their own (e.g. US, GAAP, Dutch GAAP)
- International financial reporting standards
o Applied internationally by listed companies (except US)
 Provide rules for how to account for transactions and events

Auditors (accountants):
- Big four: Deloitte, EY, KPMG, PwC
- Second tier: Baker Tilly, BDO, Grant Thornton, Mazars
 Give an opinion whethere the financial statements comply to the rules

Regulator (toezichthouder):
- Supervise companies and auditors
- Netherlands: Autoriteit Financiële Markten
- US: Securities Exchange Committee
 Give fines to companies and firms that do not stick to the rules

Purpose of financial statements today:
1. Show financial position: what does the company own and owe?
2. Accountability towards shareholders and debt investors (eg banks):
Did management generate sufficient profits and cash?
3. Accountability towards stakeholders:
How well does the company serve the interests of employees, suppliers, customers,
governments, and society at large?
4. Insight in value creation:
Provide useful information to determine how much the business is worth if it would
be sold.
5. Use all this information in management decision-making

Primary Financial statements (wat op jaarrekening?):
• Cash Flow Statement (discussed next class)
• Income Statement (winst/verlies rekening)
• Balance Sheet (balans)
• Statement of Changes in Equity (discussed next class) (verandering in eigen
vermogen)

, The profit and loss statement:


 How much profit for shareholders did
you make on the sales transactions you
completed in a certain period?

 Makes certain
assumptions about when
a sale is completed.

 Makes certain assumptions about
which costs belong to which sales.



Accrual accounting (toerekeningsbeginsel): recognizing cash flows in the period in which
they belong.
- Bv. Afschrijving

Types of income and expense:
Operating
- Revenue
- Cost of goods sold
(e.g. what you bought or manufactured it for)
- Salaries
- Depreciation
- Selling expense
- General and administrative expenses
Financing
- Interest on bank loans
- Interest from saving accounts
Tax
- Corporate income tax

Note: dividend paid to shareholders
is not an expense. It is a distribution of
profit (from this year and/or prior years)
to the shareholders.

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