BSB110 Lecture Notes - Lecture 2: Current Liability, Accounts Payable, Comprehensive Income
Accounting – Regulation, Conceptual Framework, Accounting Equation, Financial Statements
Accounting
- The process of identifying, measuring, recording, and communicating economic
transactions/events of a business operation
- Transactions – economic activities relevant to a particular business e.g. sale of an item,
purchase from a supplier
- Accounting process
oIdentifying – Measuring – Recording – Communication
oFirst three are also known as ‘bookkeeping’
oIdentifying – taking into consideration all transactions which affect business entity
oMeasuring – Quantifying in monetary terms
oRecording – analyzing, recording, classifying and summarizing transactions
oCommunication – preparing accounting reports, analyzing, and interpreting
- Roles
oCommercial accountants
oPublic accountants
oGovernment accountants
oNot-for-profit accountants
Business Organisations
- Sole Proprietorship (sole trader)
oOwned by one person e.g. restaurant, dentist, panel beaters
- Partnership
oOwned by more than one individual e.g. accountants, solicitors, doctors
- Company (Public and Private)
oOrganised as a separate legal entity and owned by shareholders e.g. BHP, CSR,
Westpac, RM Williams
oLimited liability
- Trust
oA relationship/association between 2 or more parties whereby one party holds
property in trust for the other (corporate trust is popular among small businesses)
- Co-operative
oMember-owned, controlled and used
oConsist of 5 or more people e.g. Australian Forest Growers, Ballina Fishermen’s Co-
operative Ltd.
- Not-for-Profit
oAssociations
Formed by small, non-profit, community-based groups
oGovernment (Public Sector)
Organisations owned by the government (federal, state, or local)
Conceptual Framework
- Consists of a set of concepts to be followed
- Four sections
oObjective of general purpose financial reports
Provide financial information about the reporting entity to resource
providers
Emphasises that primary users are existing and potential shareholders,
lenders, and other creditors
Provide information about financial position, financial performance and cash
flows to assist users to evaluate and predict:
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Document Summary
Accounting regulation, conceptual framework, accounting equation, financial statements. The process of identifying, measuring, recording, and communicating economic transactions/events of a business operation. Transactions economic activities relevant to a particular business e. g. sale of an item, purchase from a supplier. Roles: commercial accountants, public accountants, government accountants, not-for-profit accountants. Sole proprietorship (sole trader: owned by one person e. g. restaurant, dentist, panel beaters. Partnership: owned by more than one individual e. g. accountants, solicitors, doctors. Company (public and private: organised as a separate legal entity and owned by shareholders e. g. bhp, csr, Trust: a relationship/association between 2 or more parties whereby one party holds property in trust for the other (corporate trust is popular among small businesses) Co-operative: member-owned, controlled and used, consist of 5 or more people e. g. australian forest growers, ballina fishermen"s co- operative ltd. Formed by small, non-profit, community-based groups: government (public sector) Organisations owned by the government (federal, state, or local)
