Samenvatting
Good Accounting Summary IBA
- Vak
- Accounting
- Instelling
- Vrije Universiteit Amsterdam (VU)
Very good summary of accounting IBA course. Summary of all lectures
[Meer zien]Voorbeeld 2 van de 5 pagina's
Voorbeeld 2 van de 5 pagina's
In winkelwagengesponsord bericht van onze partner
Voorbeeld van de inhoud
SUMMARY ACCOUNTINGPart I - Financial Accounting
3 statements:
- Balance sheet: assets and liabilities
- Profit and Loss statement: influences the equity on the balance sheet
- Cash flow statement: influences the cash on the balance sheet
Accruals: difference between cashflow and profit (e.g. revenues that are not yet receipts)
Revenue: cash receipts, increase other asset, decrease liability
Expense: cash expenditure, decrease other asset, increase liability
Retained earnings: revenue - expenses - dividend Inventory
1/9 500
Ledger: simplified balance sheet for one element of the balance sheet (T-format)
2/9 200 B/S 700
Debit: increase in asset, decrease in liability, decrease in equity (expenses)
Credit: decrease in asset, increase in liability, increase in equity (revenue)
Trial balance: overview of all net debits and credits of all accounts
Accounting principles:
- Revenue Recognition Principle: recognise revenues (profit) only when realised
- Matching Principle: expenses are recognised in the come statement in the same period
as the revenues to which these expenses relate
- Prudence Principle: recognise losses when foreseen, recognise gains only when realised
- Going Concern Principle: measure assets and liabilities based on the assumption that te
business will be continued
Inventory measurement:
- Individual identification: purchase price X = cost sales item X
- Allocation formula: total purchase value / total # of units
- Inventory cost flow assumption: FIFO, LIFO
Costs of goods sold = (beginning inventory + purchases) - ending inventory
Costs of goods available for sale = beginning inventory + purchases
Weighted-average unit cost = costs of goods available for sale / total units available for sale
FIFO: most current balance sheet measurement
LIFO: most current amount costs of goods sold
REALIZED AND UNREALIZED VALUE CHANGES?
How to approach losses on receivables:
- Write off receivables directly when we think we will not get them
Write-off receivables x
Receivables x
- Valuation Allowance: the moment you sell something, you estimate if a part of it is
uncollectible
Doubtful receivables-expenses x
Allowance for doubtful receivables x
1/5
, Area 1 Area 2 Area 3
5
Managers can influence timing of revenue recognition
because of a bonus that shareholder can grant:
- Area 1: no bonus, if close to start bonus > increase
earnings, otherwise > lower (low accruals)
- Area 2: bonus increases with earnings, increase
earnings to increase bonus (high accruals) 0
- Area 3: maximum bonus, lower earnings > if you do
not recognise now, next period more earnings (low
accruals)
Fixed assets (non-current) are used for a long period
- Allocate costs to different periods in which you use the asset to make profit ( =matching)
- Using an asset over time causes loss in value
- Closing carrying amount = opening carrying amount + investments - depreciation
- 3 factors: original costs, salvage value, estimated life
Depreciation methods:
- Straight-line: costs equally distributed over the period (straight-line)
- Accelerated: book value decreases faster in beginning > 2x straight-line %
- Units-of-activity: per unit (product, machine hour, km); estimate the total number that can
be used, determine the cost per unit, allocate depending on production in the period
Example: original cost = 1000, useful life = 10 years, residual value = 100
- Straight-line: (1000 - 100) / 10 = 90 per year
- Accelerated: e.g. 20.5% of carrying amount
- Y1: 1000 * 0,205 = 205
- Y2: (1000-205) * (0,205) = 163
Intangible assets: long term value assets like patents, license, software
R&D?? GOODWILL??
3 way partition of cash flow statement:
- Operating cash flow: generate day-to-day business (incl interest)
- Investing cash flow: needed to keep the business going (lending, acquiring non-current
assets, investments)
- Financing cash flow: related to long term financing of the company (changes in
shareholders’ equity and liabilities, dividends)
Free cash flow = operating cash flow + investing cash flow (shows the value of the business)
= net operating cash flow - capital expenditures - cash dividends
Methods to prepare cash flow statement:
1. Direct method
- Derive directly from the ledger accounts
2. Indirect method
- Derive from balance sheet and income statement
- Cash flow = profit - assets. + liabilities + net receipts shareholders
- This shows a clear link between cash and profit
- Start with profit and then make adjustments
How to go from net income to cash flow from operating activities
- Add back expenses that are not a cash flow (depreciation)
- Add back losses, deduct gains on disposal of property, plant and equipment
- Correct for changes in current assets:
- Deduct increases (in e.g. inventory)
- Add back decreases
- Correct for changes in current liabilities
- Add increases in liabilities
- Deduct increases in liabilities
2/5
Voordelen van het kopen van samenvattingen bij Stuvia op een rij:
Verzekerd van kwaliteit door reviews
Stuvia-klanten hebben meer dan 700.000 samenvattingen beoordeeld. Zo weet je zeker dat je de beste documenten koopt!
Snel en makkelijk kopen
Je betaalt supersnel en eenmalig met iDeal, creditcard of Stuvia-tegoed voor de samenvatting. Zonder lidmaatschap.
Focus op de essentie
Samenvattingen worden geschreven voor en door anderen. Daarom zijn de samenvattingen altijd betrouwbaar en actueel. Zo kom je snel tot de kern!
Veelgestelde vragen
Wat krijg ik als ik dit document koop?
Je krijgt een PDF, die direct beschikbaar is na je aankoop. Het gekochte document is altijd, overal en oneindig toegankelijk via je profiel.
Tevredenheidsgarantie: hoe werkt dat?
Onze tevredenheidsgarantie zorgt ervoor dat je altijd een studiedocument vindt dat goed bij je past. Je vult een formulier in en onze klantenservice regelt de rest.
Van wie koop ik deze samenvatting?
Stuvia is een marktplaats, je koop dit document dus niet van ons, maar van verkoper femkestokkink. Stuvia faciliteert de betaling aan de verkoper.
Zit ik meteen vast aan een abonnement?
Nee, je koopt alleen deze samenvatting voor €5,49. Je zit daarna nergens aan vast.
Is Stuvia te vertrouwen?
4,6 sterren op Google & Trustpilot (+1000 reviews)
Afgelopen 30 dagen zijn er 53068 samenvattingen verkocht
Opgericht in 2010, al 14 jaar dé plek om samenvattingen te kopen