Preview

Financial accounting

Powerful Essays
Open Document
Open Document
13613 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Financial accounting
BUSN1002
Financial Accounting Processes
Semester 2, 2013

LECTURE OUTLINES 1 – 6

Topic Coordinator:
Philip Palmer
Room 3.70 Law and Commerce Building
Email: philip.palmer@flinders.edu.au
Ph: 8201 2013

FLINDERS UNIVERSITY
FLINDERS BUSINESS SCHOOL
BUSN1002 Financial Accounting Processes

Philip Palmer

Lecture Outline 1
Introduction to Financial Accounting
Reading: Hoggett et al., Chapters 1 and 2

1 Introduction to Accounting
Accounting is an information system designed to communicate financial information to interested users for making economic decisions. Accounting information is useful to those inside and outside of the entity.
Accounting is known as the language of business and generally fulfils two roles:
Stewardship
•

The more traditional role of providing accountability reports of transactions for a given period

Decision usefulness
•

Is about assisting users with making informed choices about issues e.g. resource allocation

Accounting seeks to satisfy the needs of a wide range of users:
Internal Users

• Management

Focus

• Internal focus
• Planning
• Organising
• Directing
• Controlling
• Decision-making
• Cost behaviour
• Budgeting Reports on-demand

Information Requirements

• How much profit is being earned?
• What products should be produced?
• What resources are available?
• What is the most efficient production process? • What is the cost to reduce carbon

emissions?
• What will be the effect of increasing or decreasing selling prices?
• How much profit is owing to outsiders? • Will cash be available to pay debts as they fall due?
• What are benefits of owning vs leasing? 1

External Users
• Investors
• Employees
• Lenders
• Suppliers and other trade creditors • Customers
• Governments and their agencies
• Public

• External focus

Focus

(shareholders/stakeholders)

• Reporting information
• Performance (Income statement flow concept)

•
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Best Essays

    Business Finance {Compass Group}
    • 3119 Words
    • 13 Pages

    Business Finance {Compass Group}

    Collier, P.M. (2006) ‘Accounting For Managers: Interpreting Accounting Information for Decision-making’ 2nd Edit, John Wiley 7 Sons Ltd, England.…

    • 3119 Words
    • 13 Pages
    Best Essays
    Read More
  • Better Essays

    Acc 280 Principles of Accounting Week 1 Ia Financial Statements
    • 877 Words
    • 4 Pages

    Acc 280 Principles of Accounting Week 1 Ia Financial Statements

    Understanding what is happening financially in the company insights provides the financial information system of accounting. One must have knowledge of numbers when working in accounting. The three basic activities in accounting are identifies, records, and communicates. The four financial statements are income statements, retained earnings statement, balance sheet, and statement of cash flow. Internal and external users are the groups that review financial information (Weygandt, 2008). The preparation of financial statements, are in an uncomplicated layout, easy to understand. Reporting financial statement accurately is important because if there is an error this can cause complications for the company or organization.…

    • 877 Words
    • 4 Pages
    Better Essays
    Read More
  • Good Essays

    Financial Accounting
    • 702 Words
    • 3 Pages

    Financial Accounting

    1. Welch Company purchased a put option on Reese common shares on January 7, 2010 for $215. The put option is for 300 shares, and the strike price is $51. The option expires on July 31, 2010. On March 31, 2010, the market value of Reese stock was $48 per share and the time value of the option was $120. The put option is not designated as a hedge. If the company has to prepare financial statements on March 31, 2010, what would the entry be? A debit to the Put Option and a…

    • 702 Words
    • 3 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Business Accounting
    • 1373 Words
    • 6 Pages

    Business Accounting

    I will now explain what each of these ratio 's mean to Sharma and Ryan, and how it effects their business 's overall financial performance.…

    • 1373 Words
    • 6 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    Financial Accounting
    • 400 Words
    • 2 Pages

    Financial Accounting

    The Henry Furniture Co. is a new company and has numerous fixed assets that need to be depreciated. You can help Henry by determining the depreciation rates for the assets and the amount of depreciation for year one. The assets were purchased at various times during the year (hint: watch out for the dates). The following assets will be held by the company for at least the next two years (In other words, year two will be a full year for all of the assets). Please fill in the blanks below.…

    • 400 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    Costing Methods Paper
    • 357 Words
    • 2 Pages

    Costing Methods Paper

    References: Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2009). Accounting: Tools for business decision making (3rd ed.). Hoboken, NJ: John Wiley & Sons…

    • 357 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Financial Accounting
    • 661 Words
    • 3 Pages

    Financial Accounting

    Use the following information to perform the calculations below (using the indirect method). Clearly label the amount of each answer as positive or negative and show all your calculations.…

    • 661 Words
    • 3 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    ACCT 200 Ch 1 Notes
    • 781 Words
    • 4 Pages

    ACCT 200 Ch 1 Notes

    Accounting: An information system that provides reports to users about the economic activities and condition of a business.…

    • 781 Words
    • 4 Pages
    Satisfactory Essays
    Read More
  • Better Essays

    Four Basic Financial Statements
    • 991 Words
    • 4 Pages

    Four Basic Financial Statements

    References: Mackevicius, J, & Senkus, K (2006). The System of Formation and Evaluation of the Information of Cash Flows. Journal of Business Economics and Management, 7, Retrieved January 29, 2007, from http://web.ebscohost.com/ehost/detail?vid=8&hid=13&sid=d065588d-bbd0-446d-aa9b-1b91d66af798%40sessionmgr3…

    • 991 Words
    • 4 Pages
    Better Essays
    Read More
  • Good Essays

    Introduction to Financial Accounting
    • 2076 Words
    • 9 Pages

    Introduction to Financial Accounting

    Assume the net income used to calculate diluted EPS is $609,365, what is the number of weighted average shares outstanding – diluted (the denominator used in calculating diluted earnings per share) in 2008?…

    • 2076 Words
    • 9 Pages
    Good Essays
    Read More
  • Better Essays

    Week 1 Financial Statements Paper
    • 953 Words
    • 3 Pages

    Week 1 Financial Statements Paper

    The income statement reports the operational success or failure of a company for a specified period of time (Kimmel, et al., 2011). The information is grouped into three categories, revenues, expenses, and net income. Revenue is the inflow of capital that is brought into the company through its business activities, such as the sale of a product or service. Expenses, the opposite of revenues, are the costs businesses incur through normal operations in order to earn revenues. Net income, also referred to as the bottom line, is the profit earned by a company through its business operations. It is calculated by taking the difference between the revenues earned and the total expenses over a specific period of time (Kimmel, et al., 2011). The income statement serves as an indicator of the profitability of an organization over a…

    • 953 Words
    • 3 Pages
    Better Essays
    Read More
  • Powerful Essays

    Why Are Accurate Financial Statements Important for Outside Business Interests
    • 1445 Words
    • 6 Pages

    Why Are Accurate Financial Statements Important for Outside Business Interests

    Accounting is specifically “a system by which economic information is identified, recorded, summarized and reported for the use of decision makers”; however, accounting involves interpretation and analyzing of all financial information, including taxing, personal financial information and investment (Alba, Bathija, & Thonton, 2005). Accounting is defined as the language of business, in that it specifically records the financial data that is required for businesses to operate both efficiently and effectively. Modern accounting includes investigation, forecasting, analyzing, compliance, as well as record keeping and report generation (Gaylord & Ried, 2006). Accounting is said to be a service activity designed to accumulate, measure, and communicate financial information about businesses and other organizations and to provide information for making informed decisions about the business and about how to best utilize resources within the business (Albreacht, Stice, Stice, & Swain, 2008). Accounting leads to the generation of reports and documents, which include financial statements. If accounting is the language of business, then accounting financial statements are the dictionary that defines the terms and the rules of the language (Horngren, Harrison, & Oliver, 2012).…

    • 1445 Words
    • 6 Pages
    Powerful Essays
    Read More
  • Satisfactory Essays

    Financial Accounting
    • 816 Words
    • 4 Pages

    Financial Accounting

    | What was the average annual rate of return on 3-month U.S. Treasury bills during the period 1984 to 2008?…

    • 816 Words
    • 4 Pages
    Satisfactory Essays
    Read More
  • Powerful Essays

    Advanced Corporate Accounting 1
    • 2719 Words
    • 11 Pages

    Advanced Corporate Accounting 1

    ACCT2202 Advanced Corporate Accounting Week 1: Unit introduction ACCT2202 Advanced Corporate Accounting: Unit staff • Lecturer-in-charge and tutor • Dr Rick Newby • Tutors • Mr Val Chin (Val.Chin@uwa.edu.au) • Mr Kevin Burns (Kevin.Burns@uwa.edu.au) Unit overview: Learning outcomes • Completion of this unit should help you to: • interpret and apply specific requirements of a range of Australian Accounting Standards (AASBs) • critically evaluate accounting requirements under Australian GAAP • prepare general purpose financial statements for Australian reporting entities; and • discuss and apply advanced concepts to the preparation of consolidated and/or equity financial statements Unit overview: Educational principles…

    • 2719 Words
    • 11 Pages
    Powerful Essays
    Read More
  • Good Essays

    Four Basic Accounting Statements
    • 632 Words
    • 3 Pages

    Four Basic Accounting Statements

    The purpose of accounting is to provide insight into finances. It could be a company or an individual person’s finances. Accounting is used to show how a company is doing financially and companies use the information to make important economic decision. Accounting consists of three basic activities-it identifies, records, and communicates the economic events of an organization to interested users (Weygandt, 2008). Accountants identify economic events like sales of goods and services relevant to the business. They record these events to keep an accurate financial history of these events. The recordings are kept in chronological order to keep records organized and more accurate. The records of information become accounting reports, which are communicated to others who have some interest or stake in the company. Those records are analyzed, interpreted, and used to make important business decisions regarding the company’s future.…

    • 632 Words
    • 3 Pages
    Good Essays
    Read More

Related Topics