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Accounting: Difference between revisions
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In [[w:financial accounting]], a '''[[w:balance sheet]]''' or '''statement of financial position''' 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". Of the four basic [[w:financial statements]], the balance sheet is the only statement which applies to a single point in time of a business' calendar year. ( Wikipedia ) | In [[w:financial accounting]], a '''[[w:balance sheet]]''' or '''statement of financial position''' 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". Of the four basic [[w:financial statements]], the balance sheet is the only statement which applies to a single point in time of a business' calendar year. ( Wikipedia ) | ||
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== Accounting for a New Business 2 == | |||
Course consists of mostly '''[[w:Managerial accounting]]''' and '''[[w:cost accounting]]''' | |||
Topics covered: | |||
* [[w:Forecasting]] [[w:revenue]]s, [[w:sales]] [[w:budgeting]] | |||
* [[w:Pricing]] of products and services | |||
* Estimation of [[w:operational costs]] | |||
* [[w:Profitability]], feasible [[w:business plan]] | |||
* Required [[w:investments]] and [[w:working capital]] | |||
* [[w:Bank loan]]s and other [[w:financial instruments]] | |||
* Annual percentage rate of charge for [[w:loans]] and [[w:credits]] | |||
==== Accounting 2 class week 14 ==== | |||
Topics: Financial flows | |||
* '''[[w:cost-volume-profit analysis]]''' | |||
::in managerial economics, is a form of cost accounting. It is a simplified model, useful for elementary instruction and for short-run decisions. ( Wikipedia ) | |||
* '''[[w:Contribution margin]]''' | |||
::In [[w:cost-volume-profit analysis]], a form of [[w:management accounting]], '''contribution margin''' is the marginal profit per unit sale. It is a useful quantity in carrying out various calculations, and can be used as a measure of [[w:operating leverage]]. Typically, high contribution margins are prevalent in the labour-intensive tertiary sector while low contribution margins are prevalent in the capital-intensive industrial sector.n ( Wikipedia ) | |||
* '''[[w:Break-even]]''' (or break even) is the point of balance between making either a profit or a loss. The term originates in finance, but the concept has been applied widely since. ( Wikipedia ) | |||
* '''[[w:Margin_of_safety_(accounting)#Margin_of_Safety|Margin of safety]]''' represents the strength of the business. It enables a business to know what is the exact amount it has gained or lost and whether they are over or below the break even point. ( Wikipedia ) | |||
* '''[[w:Operating leverage]]''' is a measure of how revenue growth translates into growth in operating income. Leverage, and of how risky (volatile) a company's operating income is. ( Wikipedia ) | |||
::Homework: ex. 4,5,6,7 | |||
==== Accounting 2 class week 15 ==== | |||
==== Accounting 2 class week 16 ==== | |||
* '''[[w:Pricing]]''' | |||
:: Long-run vs. short-run pricing approaches | |||
*'''[[w:Target costing]]''' or '''target pricing''' is a [[w:pricing]] method used by firms. It is defined as "a cost management tool for reducing the overall cost of a product over its entire [[w:Product lifecycle (engineering)|life-cycle]] with the help of production, engineering, research and design". A target cost is the maximum amount of cost that can be incurred on a product and with it the firm can still earn the required [[w:profit margin]] from that product at a particular selling price. ( Wikipedia ) | |||
*'''[[w:Cost-plus pricing]]''' is a pricing method used by companies to maximize their rate of returns. ( Wikipedia ) | |||
==== Accounting 2 class week 17 ==== | |||
* '''[[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. | |||
* The '''[[w:current ratio]]''' is a [[w:financial ratio]] that measures whether or not a firm has enough resources to pay its debts over the next 12 months. It compares a firm's [[w:current asset]]s to its [[w:current liabilities]]. ( Wikipedia ) | |||
* The '''Acid-test''' or '''[[w:quick ratio]]''' or '''liquid ratio''' measures the ability of a company to use its ''near cash'' or quick assets to extinguish or retire its [[w:current liability|current liabilities]] immediately. Quick assets include those [[w:current asset]]s that presumably can be quickly converted to cash at close to their [[w:book value]]s. ( Wikipedia ) | |||
* '''[[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 ) | |||
==== Accounting 2 class week 18 ==== | |||
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