Accounting: Difference between revisions

{{bookkeeping}}

* '''[[w:Double-entry accounting]]''' ( or '''double-entry [[w:bookkeeping]] system''' [[w:fi:Kahdenkertainen kirjanpito]]) is a set of rules for recording financial information in a [[w:financial accounting]] system in which <u>'''''every transaction'''''</u> or event <u>'''''changes at least two'''''</u> different nominal [[w:ledger]] <u>'''''accounts'''''</u>. ( Wikipedia )

:* '''Management accounting''' or '''[[w:managerial accounting]]''' is concerned with the provisions and use of accounting information to managers within organizations, to provide them with the basis to make informed business decisions that will allow them to be better equipped in their management and control functions. ( Wikipedia )

:*For every '''[[w:fiscal year|fiscal year]]''' ( [[w:fi:Tilikausi]] )a business must produce a '''[[w:annual report]]''' which contains ( in [[w:Finland]] )

:** the annual '''[[w:financial statement]]''' ( [[w:fi:Tilinpäätös]] ) which contains naturally  

:** Textform description of businesses activities ( [[w:fi:toimintakertomus]] )

:* '''[[w:Income statement]]''' (also referred to as '''profit and loss statement (P&L)''', '''revenue statement''', '''statement of financial performance''', '''earnings statement''', '''operating statement''' or '''statement of operations)'''is a company's '''[[w:financial statement]]''' that indicates how the revenue (money received from the sale of products and services before expenses are taken out, also known as the "top line") is transformed into the net income (the result after all revenues and expenses have been accounted for, also known as Net Profit or the "bottom line"). ( Wikipedia )

::<tt>Mnemonic:</tt> ''"The [[w:income statement]] describes the income possibilities of the [[w:entrepreneur]] with 100% of shares <u>not</u> the income of the business, that's called the [[w:top line]] and is only small part of the whole thing."''

:* A '''[[w:Balance sheet]]''' or '''statement of financial position''' ( in [[w:financial accounting]] ) is a summary of the financial balances of a [[w:sole proprietorship]], a [[w:Partnership|business partnership]], a [[w:corporation]] or other business organization, such as an [[w:Limited liability company|LLC]] or an [[w:LLP]]. [[w:Asset]]s, [[w:liability (financial accounting)|liabilities]] and [[w:ownership equity]] are listed as of a specific date, such as the end of its [[w:financial year]]. A balance sheet is often described as a ''"snapshot of a company's financial condition"''. ( Wikipedia )

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Topics covered:

* Annual percentage rate of charge for [[w:loans]] and [[w:credits]]

* '''[[w:cost-volume-profit analysis]]'''

::Homework: ex. 4,5,6,7

* '''[[w:Pricing]]'''

:: Long-run vs. short-run pricing approaches

*'''[[w:Cost-plus pricing]]''' is a pricing method used by companies to maximize their rate of returns. ( Wikipedia )

* '''[[w:Operating leverage]]''' is a measure of how revenue growth translates into growth in '''[[w:operating income]]'''. '''[[w:Leverage (finance)|Leverage]]''', and of how risky (volatile) a company's operating income is.

* '''[[w:Return on investment]]''' ('''ROI''') is the concept of an [[w:investment]] of some resource yielding a benefit to the investor. As a performance measure, it is used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. ( Wikipedia )

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# lesson: '''Cost behaviour''' and '''[[w:cost object|cost object]]s

# lesson: '''Short term business decisions'''

* '''A [[w:Cost object|Cost object]]''' is a tangible input for a product manufactured/service provided, like labor or material. ( Wikipedia )

* '''[[w:Working capital|Working capital]]''' or '''operating capital''' is a financial metric which represents [[w:Accounting liquidity|operating liquidity|]] available to a business, organization or other entity, including governmental entity.  Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital. Gross working capital equals to current assets. Net working capital (NWC) is calculated as [[w:current assets|current assets]] minus [[w:current liabilities|current liabilities]]. ( Wikipedia )

* In [[w:Production (economics)|production]], [[w:research|research]], [[w:retail|retail]], and [[w:accounting|accounting]], a '''[[w:cost|cost]]''' is the value of [[w:money|money]] that has been used up to produce something, and hence is not available for use anymore. ( Wikipedia )

Recap   

* '''[[w:cost-volume-profit analysis]]'''

*'''[[w:Cost–volume–profit analysis|Cost–volume–profit analysis]]''' ('''CVP'''), in [[w:managerial economics|managerial economics]], is a form of [[w:cost accounting|cost accounting]]. It is a simplified model, useful for elementary instruction and for short-run decisions. ( Wikipedia )

* A '''[[w:budget|budget]]''' is a quantitative expression of a plan for a defined period of time. It may include planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows. ( Wikipedia )

* '''Expenditure budget''' – includes spending data items. ( Wikipedia )

'''[[w:Activity based costing|Activity based costing]]''' ('''ABC''')  is a costing methodology that identifies activities in an organization and assigns the cost of each activity with resources to all products and services according to the actual consumption by each. This model assigns more [[w:indirect costs|indirect costs]] ([[w:overhead (business)|overhead]]) into [[w:direct costs|direct costs]] compared to conventional costing. ( Wikipedia )

* '''[[w:Sensitivity analysis|Sensitivity analysis]]''' is the study of how the [[w:uncertainty|uncertainty]] in the output of a [[w:mathematical model|mathematical model]] or system (numerical or otherwise) can be apportioned to different sources of [[w:uncertainty|uncertainty]] in its inputs. ( Wikipedia )

'''Short term business decisions'''

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* [[Finance]]

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:* '''[[w:Category:Accounting terminology]]'''

: '''[[w:analysis#Business|Business and investment analyses]]:'''

:build upon understanding of accounting and business math terminology and procedures.

= Navboxen =

== Accounting software ==

[[Category:realcontent]]