Introduction Traditionally‚ cash basis of accounting has been used in the public sector; however‚ in recent years extensive debates have emphasised whether a move to accruals basis of accounting would be more feasible. The proponents argue for such a change due to the benefits accruals basis has to offer. There are still heavyweight supporters for cash basis such as IFAC – a body that issued 21 IPSAS based on IMF‚ EU Commission‚ and IFRS / IAS (Jorge Faustino‚ 2008). Moreover‚ there are several organisations
Premium Generally Accepted Accounting Principles Financial statements Government
*Functions of Accounting Work ( Recording / Classifying / Summarizing *Accounting- “art of recording‚ classifying & summarizing in a significant matter and in terms of money; transactions and events w/c are in part at least of a financial character and interpreting the results thereof.” ( How? (AICPA – American Institute of CPA) *Science- existing body of knowledge that governs accounting practice (Accounting Theory) *Art- creative skill & ability *4 Functions of Accounting 1. Recording-
Premium Balance sheet Generally Accepted Accounting Principles Accounts receivable
Why would users rely on financial statements? What is an example of a financial measure that an external user might use? What is an example of a financial measure that an internal user might use? Users rely on financial statements to gauge the strength and outlook of companies. Others understand that. One would want that company to make money for them when they invest. If companies didn’t make money for you there would be no reason to buy stocks and no reason the price of a stock would ever
Premium Balance sheet Income statement Financial statements
Accounting Principles‚ Concepts and Conventions Accounting principles are guidelines & standards‚ which have been accepted by the accounting profession in preparation and presentation of accounts of the business. It is approved and normally accepted by the government bodies &controlling authorities. Accounting principles are uniform in order to understand in the same sense by those using it. Also they are not rigid (i.e. inflexible) like principle of gravity but they are flexible.
Premium Generally Accepted Accounting Principles Balance sheet Business
Multiple Choice (80%) 1. Which of the following is not a category of financial statement ratios? a. Financial leverage. b. Liquidity. c. Profitability. d. Prospectus. 2. An individual interested in making a judgment about the profitability of a company should: a. review the trend of working capital for several years. b. calculate the company’s ROI for the most recent year. c. review the trend of the company’s ROI for several years. d. compare the company’s ROI for the most recent year
Premium Investment Finance Financial ratio
CHAPTER 4 INCOME STATEMENT AND RELATED INFORMATION IFRS questions are available at the end of this chapter. TRUE-FALSe—Conceptual Answer No. Description T 1. Usefulness of the income statement. F 2. Limitations of the income statement. F 3. Earnings management. T 4. Transaction approach of income measurement. T 5. Single-step income statement. T 6. Revenues and gains. F 7. Multiple-step vs. single-step income statement. F 8. Multiple-step income statement. T 9. Multiple-step
Premium Income statement Revenue Income
Predicting anticipated cash shortages is vital for a business. Budgeting allows us to gain an understanding of when these cash shortages might arise and how to best manage them. For example predicting a cash shortage ahead of time will allow applications for loans to be made and hopefully approved depending on current financial situations. 3.14 While it is a good idea to have some cash saved for a rainy day having too much can be a negative for a business. For example extra cash can be used for expansion
Premium Cash flow Budget Income statement
ACCOUNTING Harmonization of Accounting Standards Samir S. Mogul < E X E C U T I V E S U M M A R Y > ◆ International community has long back recognised the need for moving towards harmonisation of the accounting standard across the globe. Obviously on individual country is always entitled to costomise the existing international accounting Standards according to its specific needs. Among other advantages of harmonisation of accounting standards‚ the two benefits which tops the list are (a)
Premium International Financial Reporting Standards International Accounting Standards Board International relations
Introduction to Financial Accounting Introduction to Financial Accounting The question asked was what accounting and auditing standard does Abercrombie and Fitch utilize. We also need identify the accounting and auditing standard for Hennes and Mauritz. Lets discuss the difference standards and where they are enforced. In accounting there are standards and practices that each company has to adhere to when dealing with finance. There
Premium International Financial Reporting Standards Financial statements
The lean accounting method was first developed and introduced by Toyota and other Japanese companies. Toyota executives claim that the famed Toyota Production System was inspired by what they learned during visits to the Ford Motor Company in the 1920s and developed by Toyota leaders such as Taiichi Ohno and consultant Shigeo Shingo after World War II. As pioneer American and European companies embraced lean manufacturing methods in the late 1980s‚ they discovered that lean thinking must be applied
Premium Lean manufacturing Manufacturing