accounting

• Assets are resources that have value to a business.
• It shows the financial position of a business on a specific date.
• The balance sheet is prepared at the end of an accounting period, usually annually.
• Liabilities are debts or obligations owed by the business.
• Income statement shows how much profit/loss has been made during an accounting period.
• The balance sheet is also known as the statement of financial position or statement of assets and liabilities.
• Equity is the residual interest in assets after deducting liabilities from them.
• A trial balance is used as a check to ensure all accounts are balanced.
• Trial balances can be created using spreadsheet software or manual methods.
• A current asset is an asset which can be converted into cash within one year, such as stock, debtors, bank balances, etc.
• Stakeholders

  • Customer
  • Investors
  • Employees
  • Sponsors
  • Government
  • Australian tax office
  • Management teams
  • Suppliers
  • Bank
  • Creditors/ account payables

   

   

   

   

   
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  Objectives of accounting

  •  evaulating performance
  • Discharging accountiblity
  • Decision making
• End of year reports

  • Statement of profit and loss (R - E = NP/NL)
  • Statement of finacial positions (OE = A - L) accounting equation
  • Statement of cash flow (cash going in - cash going out = what I'm left with)
• CPA Australia

  • Cater primarily for members who have tertiary qualification
• CA ANZ

  • Cater primarily for members who have tertiary qualification
• IPA

  • Caters for accounting practitioners who are recognised for their practical and hands on skills although they do also have members who have tertiary qualification
• Sole trader

  • 1 owner
  • Unlimited liability
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  Partnership

  • 2-20 owners
  • Partnership act
  • Divide the profit/loss equally
  • Partnership agreement
  • Unlimited liability
• company

   

  Private co

  • Pty ltd
  • 1-50 share holders
  • Cooperation act

  Public

  • Ltd
  • 5 - infinite share holders
  • ASX (Australian stock exchange)
• What is accounting?

  • Accounting is a discipline that measures, records and processes financial and other information about an entity and reports and interprets that informs to interested parties to enable them to make appropriate decision