Do not want to open the book? In less than 30 (airy) pages, this summary contains all the core definitions, models and theories to obtain an 8 for this course.
Jammer dat je niet tevreden bent, Caroline. Wat mis je in de samenvatting? Ik heb vanuit deze basis in combi met fiks oefenen een 8.5 gehaald.
Verkoper
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aaantjes
Ontvangen beoordelingen
Voorbeeld van de inhoud
CHAPTER 1 – ACCOUNTING IN BUSINESS
Parts of Accounting:
- Identifying – select transactions and events
- Recording – input, measure and classify
- Communicating – Prepare, analyze and interpret
Users of Accounting Information:
- Internal – officers, managers, internal auditors, sales staff etc.
- External – lenders, shareholders, government, external auditors etc.
STANDARDS
Regulators:
- Securities and Exchange Commission (SEC), the US regulator
o FASB – sets US GAAP standards (Generally Accepted Accounting
Policies)
Required for US SEC registrants
o IASB – sets IFRS standards (International Financial Reporting
Standards)
Non-US SEC registrant can opt for either US GAAP or IFRS
- Autoriteit Financiële Markten (AFM), the NL regulator
The FASB and IASB are attempting to converge and enhance the conceptual
framework that guides standard setting.
ACCOUNTING PRINCIPLES
- Measurement principle (or Cost principle) – actual cost, with a
potential subsequent adjustments to market. (‘fair value’ is covered later
on)
- Revenue Recognition principle – when to recognize (record) revenue:
o When earned (when good is transferred or services are provided).
Not sooner, later.
o Need not be in cash – can also be credit sales.
o Measured by cash received + the cash value of any other items
received
- Expense Recognition principle (or Matching principle) – record
expenses incurred to generate the revenue reported. Key to modern
accounting.
- Full Disclosure principle – report the details behind financial statements
that would impact users’ decisions. Often in footnotes to statements.
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264678721 Anne Aantjes
, ACCOUNTING ASSUMPTIONS
- Going-concern assumption – valuation without presumption of business
to close of be sold. Thus valuation on cost instead of, say, liquidation
values.
- Monetary unit assumption – express transactions and events in
monetary (or money) units.
- Time period assumption – period on which is accounted/reported, e.g.
months, quarters, years.
- Business entity assumption, one of three legal forms (US):
o Sole proprietorship – one owner
o Partnership – two or more partners
(Both proprietorships and partnerships are mostly LCCs)
o Corporation – these involve shareholders
ACCOUNTING CONSTRAINTS
- Materiality constraint – only information that would influence the
decisions of a reasonable person need to be disclosed.
- Cost-benefit constraint – only information with benefits of disclosure
greater that the costs of providing it, need to be disclosed.
SARBANES-OXLEY (SOX)
Intended to curb financial abuse. To increase transparency, accountability ad
truthfulness.
Requires public (listed) companies to implement:
- Accounting oversight
- Stringent Internal Controls
ACCOUNTING EQUATION
Assets = Liabilities + Equity (Bezittingen = Schulden + Eigen Vermogen)
- Assets – resourced owned / controlled, expected to yield future benefit.
- Liabilities – creditors’ claim on assets.
- Equity – owner’s claim on assets.
o Owner Capital (+)
o Owner Withdrawals (-/-)
o Revenues (+)
o Expenses (-/-)
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264678721 Anne Aantjes
, Net income: revenues > expenses, resulting in a increase in Equity.
Net loss: revenues < expenses, resulting in a decrease in Equity.
VARIOUS EXAMPLES, PAGE 15-18
FINANCIAL STATEMENTS (REQUIRED UNDER IFRS)
1. Income Statement (Winst & Verlies rekening) over a period of time:
a. Revenues,
b. Expenses, and the resulting
c. Net income / loss
2. Statement of Owner’s Equity - Change in equity over a period of time
from
a. Net income (or loss), and from,
b. Owner investments / withdrawals
3. Balance Sheet (Balans) - Financial position at a point in time:
a. Assets
b. Liabilities
c. Equity
4. Statement of Cash Flow (Kasstroom overzicht), over a period of time:
a. Cash inflows (receipts)
b. Cash outflows (payments)
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264678721 Anne Aantjes
, CHAPTER 2 – ANALYZING AND RECORDING TRANSACTIONS
ANALYZING AND RECORDING PROCES
General ledger (overview of all accounts, balans)
- Asset Accounts
o Cash
o Accounts receivable
o Note receivable (formal, e.g. contract etc)
o Prepaid accounts / Prepaid expenses
o Supplies
o Equipment
o Buildings
- Liability Accounts
o Accounts payable (oral)
o Note payable (formal)
o Unearned revenues (advance payments, goods/services to be
delivered)
o Accrued liabilities (wages payable, interest payable etc)
- Equity Accounts
‘Owners Equity’
Asset Accounts – Liability Accounts
o Owner’s capital
o Owner’s withdrawals
o Revenues (P&L, plus)
o Expenses (P&L, minus)
ANALYZING AND PROCESSING TRANSACTIONS
ASSETS = LIABILITIES + EQUITY
DEBIT CREDIT DEBIT CREDIT DEBET CREDIT
increas decrea decrea increas decreas increas
es ses ses es es es
+ -/- -/- + -/- +
ASSETS = LIABILITIES + EQUITY, where EQUITY is:
OWNER -/- OWNER + REVENUES -/ EXPENSES
CAPITAL WITHDR. -
DEBIT CREDI DEBIT CREDI DEBIT CREDI DEBIT CREDI
T T T T
decr. incr. decr. incr. decr. incr. incr. decr.
-/- + + - -/- + + -
VARIOUS EXAMPLES, PAGE 59-63
TRIAL BALANCE
TB is the complete list of accounts with their respective Debit or Credit
balance at a given point in time. Total Debit = Total Credit.
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264678721 Anne Aantjes
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