Week 2 Lecture Notes Acct1501
THE UNIVERSITY OF
NEW SOUTH WALES
Australian School of Business
School of Accounting
ACCT 1501: Accounting and Financial Management
1A
Week 2
Measuring & Evaluating Financial Position & Performance
Student Handout
Lecturer:
Dr. Youngdeok Lim
School of Accounting
UNSW
QUAD 3069 youngdeok.lim@unsw.edu.au Blackboard: http://telt.unsw.edu.au
Session 1, 2013
WEEK 2: Measuring & Evaluating Financial Position &
Performance
1.
Introduction
Every commercial entity engages in transactions with other parties. Woolworths buys products from suppliers, employs shop assistants, builds new stores, sells groceries and each individual transaction is recorded and reported in the Balance Sheet. Individual retail stores would report their profitability and the costs of running each store categorising their expenses so management are fully informed of the cost involved in running each service or retail store. They will even have information about the individual products they sell through internal reporting and cost profit sales analysis. In this lecture we will examine the communication of financial information in the Income Statement through to the Balance Sheet.
Learning objectives
At the end of this topic, you should be able to:
•
Understand the terms, format and function of the Balance Sheet & the Income
Statement
•
Identify the components of financial statements
•
Describe the relationship between the balance sheet and the income statement
•
Understand the implications of the decision to record expenditure as an asset or as an expense
•
Understand the differences between cash profit and accrual profit
Required Reading
Trotman, Gibbins & Carson Chapter 2
AASB: Framework for Presentation of Financial Statements (downloadable from your course website or http://www.aasb.gov.au )
Session 1, 2013
2.
Tutorial Questions – Week 3
Preparation Questions
•
•
•
DQ 2.1, 2.2
P2.3
Case 2A
NEW SOUTH WALES
Australian School of Business
School of Accounting
ACCT 1501: Accounting and Financial Management
1A
Week 2
Measuring & Evaluating Financial Position & Performance
Student Handout
Lecturer:
Dr. Youngdeok Lim
School of Accounting
UNSW
QUAD 3069 youngdeok.lim@unsw.edu.au Blackboard: http://telt.unsw.edu.au
Session 1, 2013
WEEK 2: Measuring & Evaluating Financial Position &
Performance
1.
Introduction
Every commercial entity engages in transactions with other parties. Woolworths buys products from suppliers, employs shop assistants, builds new stores, sells groceries and each individual transaction is recorded and reported in the Balance Sheet. Individual retail stores would report their profitability and the costs of running each store categorising their expenses so management are fully informed of the cost involved in running each service or retail store. They will even have information about the individual products they sell through internal reporting and cost profit sales analysis. In this lecture we will examine the communication of financial information in the Income Statement through to the Balance Sheet.
Learning objectives
At the end of this topic, you should be able to:
•
Understand the terms, format and function of the Balance Sheet & the Income
Statement
•
Identify the components of financial statements
•
Describe the relationship between the balance sheet and the income statement
•
Understand the implications of the decision to record expenditure as an asset or as an expense
•
Understand the differences between cash profit and accrual profit
Required Reading
Trotman, Gibbins & Carson Chapter 2
AASB: Framework for Presentation of Financial Statements (downloadable from your course website or http://www.aasb.gov.au )
Session 1, 2013
2.
Tutorial Questions – Week 3
Preparation Questions
•
•
•
DQ 2.1, 2.2
P2.3
Case 2A