ACCT1501 Lecture Notes - Lecture 1: Cash Flow Statement, Accounts Payable, Management Accounting
18 May 2018
School
Department
Course
Professor
Friday, 3 March 2017
Accounting & Financial Management 1A
Introduction
-Accounting: Process of identifying, measuring, recording and communicating
economic information to assist users to make decisions
-Financial Accounting:
•Provision of information to users external of enterprise (reporting financial position
and performance)
-Management Accounting:
•Provision of information to users within enterprise (aid operational planning &
control decisions)
-Balance Sheet: Financial position of enterprise at particular point in time
•Financial position - enterprise’s set of financial resources & obligations at a time
•Assets (resources) - benefit company this year (current) or future (non-current)
•Liabilities - what the company owes (e.g. accounts payable, loan payable)
•Equity (net assets) - what belongs to owner, the residual (after liabilities - e.g. share
capital & retained profits)
Assets = Liabilities + Owner’s Equity
-Income Statement: Financial performance of an enterprise over a period of time
•Financial performance - generating new resources from operations over time
-Cash Flow Statement: Cash inflows & outflows over a period of time
•Operating activities - main revenue producing activities
•Investing activities - acquisition & disposal of long term assets
•Financing activities - equity capital & borrowing
-Consolidated Financial Statement:
•Factor holding (parent) company’s subsidiaries into aggregated accounting figure
•Subsidiary - company controlled by parent company
•Shows how holding company is doing as a group - financial & operating conditions
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Document Summary
Accounting: process of identifying, measuring, recording and communicating economic information to assist users to make decisions. Financial accounting: provision of information to users external of enterprise (reporting nancial position and performance) Management accounting: provision of information to users within enterprise (aid operational planning & control decisions) Income statement: financial performance of an enterprise over a period of time: financial performance - generating new resources from operations over time. Cash flow statement: cash in ows & out ows over a period of time: operating activities - main revenue producing activities, investing activities - acquisition & disposal of long term assets, financing activities - equity capital & borrowing. Consolidated financial statement: factor holding (parent) company"s subsidiaries into aggregated accounting gure, subsidiary - company controlled by parent company, shows how holding company is doing as a group - nancial & operating conditions. Accrual accounting: revenues & expenses recognised at time they occur not when cash is paid or received.
