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York University
Administrative Studies
ADMS 1500
Paul Evans

ADMS 1500 CH 1 Financial Accounting – Responsible for recording transactions, measuring, and disclosing. Management accounting – The process of measurement, accumliation, analysis, preparation, interpretations, and communication of information that assists managers in making decisions. Accounting – Process of recording, organizing, and communicating financial information. CH 2 Operating Income = Revenues – operating expenses. Net Income = Operating profit – taxes and interest. Return on Assets (%) = (Operating income/Total assets) x 100% Return on Equity/Investment (%) = (Net income/Shareholder’s equity) x 100% Representative Faithfulness – None of the information is being left out, no gaps in #s. 8 Accounting Concepts; Accrual – Recording of revenues and expenses in the time period when the economic flow occurs, rather than when the cash is received or paid, Business Entity – business is all business in transactions, Historical Cost, Going Concern – If they’re leaving the marker, everything has an exit price, Periodicity – Business life of a business/periodic reports of what’s going on at a specific time, Conservatism/Neutrality – show loss but not increase until increase/unbiased as possible, Recognition – governs the point at which a transaction has said to happen, Matching – sales revenue realized in a period to be reported in the same period and not another, Materiality – financial statements should only have large itemed data, not a 2 dollar coffee, Constant Dollar – don’t takeAmerican money in a New Zealand business. CH 3 – Income Statement 1.) Sales (Revenue): ______, ______, ______ - own lines. Everything sold for year in question + any withdrawed cash (transactions for cash, debit, credit). Total Revenue = ______ 2.) Cost of Sales (COGS): ______, ______, ______ - own lines. Everything that went into making or production (labour, supplies, etc) Total Cost of Sales = (______) 3.) Goss Profit/Margin (TTL Rev – TTL COGS) = ______ 4.) Expenses (General, Selling,Admin): _____, _____, _____, _____ - own lines. Variables that depreciate, net Income (amortization, insurance, utilities, rent, wages, NOT Liabilities/debt orAssets or SE) Total Expenses = (______) 5.) Net Income (Gross profit/margin – Total expenses) = ______ CH 4-5: Balance Sheet 1.) Assets – Everything company owns Current Assets: ____, ____, ____, own lines. (Cash, short term investments, accounts receivables, inventory, retained earnings). Long-term Assets: ____, ____, ____, own lines. (Amortization of buildings, land, equipment, patents) TotalAssets: _____ 2.) Liabilities – everything the company owes Current Liabilities: ____, ____, ____, own lines. (Trade Payables, Short-term loans/debts, accrued expenses (owing to suppliers), Long-term Liabilities: ____, ____, ____, own lines. (Mortgage lone, 10 year loans) Total Liabilities: (_____) 3.) Owners Equity – What is received after total assets – liabilities. ______ CH 10: To make an operating profit of $___,___ how much sales revenue must be earned  ([fixed cost+required profit] / cont margin per desk) x selling price. Contribution Margin Ratio: Sales Rev-COGS = Gross Margin. Cont Margin/Sales Rev. To make an operating profit of ___,___ how much revenue  (Fixed Cost + Required Profit) / cont margin ratio. CH 13 – Sources of Capital Weighted Average Cost of Capital • WAAC: (%rate of debt x (1 – rate of tax) x %of debt between debt-equity) + (%rate of SH/E or E x %of equity between debt/equity). (rd x (1-tr) x %D) + (rSH/E x %E) CH 14 – Long Term Decision Making Present Value: • 1$ today is not worth 1$ tomorrow. • Simple Interest: Principle x Interest Rate Per Year • Fix annum: Principle for year 1 x Interest Rate = Principle Year 2 x Interest Rate.. • Higher rate, higher growth. • Compound Interest: Looking at the principle at different interest rate and years. •
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