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<big>'''This page has permanently moved to the [https://develop.consumerium.org/wiki/User:Jukeboksi/BBA_studies/Accounting Consumerium.org development wiki]'''</big> | |||
{{accounting}} | {{accounting}} | ||
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{{bookkeeping}} | {{bookkeeping}} | ||
= Accounting for a New Business 1 = | |||
Teacher: Heli Kortesalmi | |||
Type of course: [[:Category:Mandatory courses in GloBBA|Mandatory course in GloBBA]] | |||
Course code: N/A | |||
Part of: [[:Category:Developing Entrepreneurial Competencies]] (BUS1LF001) | |||
Course material: ? | |||
== Accounting for a New Business 1 - Lesson 1 - Double-entry bookkeeping, credit and debit == | |||
* '''[[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 ) | * '''[[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 ) | ||
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:* '''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 ) | :* '''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 ) | ||
=== | == Accounting for a New Business 1 - Lesson 2 - Assets, liabilities and equity == | ||
( [[w:fi: | :* Team quiz on new terminology ( [[w:Category:Accounting terminology]] ) | ||
:* '''[[w:Assets]]''' | |||
:* '''[[w:Liabilities]]''' | |||
:* '''[[w:Equity (finance)]]''' ( [[w:fi:Oma pääoma]] ) | |||
---- | |||
== Accounting for a New Business 1 - Lesson 3 - Accrual == | |||
:*'''[[w:Accrual]]''' (''accumulation'') of something is, in [[w:finance]], the adding together of [[w:interest]] or different [[w:investments]] over a period of time. It holds specific meanings in [[w:accounting]], where it can refer to accounts on a [[w:balance sheet]] that represent liabilities and non-cash-based assets used in accrual-based accounting. These types of accounts include, among others, [[w:accounts payable]], [[w:accounts receivable]], [[w:Goodwill (accounting)|goodwill]], [[w:deferred tax]] [[w:liability (accounting)|liability]] and future interest expense. ( Wikipedia ) | |||
---- | |||
== Accounting for a New Business 1 - Lesson 4 - VAT accounting == | |||
* '''[[w:VAT]] accounting''' ( [[w:fi:Arvonlisävero]] ) | |||
* [[w:VAT]] vs. [[w:sales tax]] ( not the same thing ) | |||
---- | |||
== Accounting for a New Business 1 - Joint exam with Business Math 1 == | |||
:Joint exam with [[Math#Business Math 1|Business Math 1]] | |||
---- | |||
= Balances and flow statements = | |||
:*For every '''[[w:fiscal year|fiscal year]]''' ( [[w:fi:Tilikausi]] )a business must produce a '''[[w:annual report]]''' which contains ( in [[w:Finland]] ) | :*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 | :** the annual '''[[w:financial statement]]''' ( [[w:fi:Tilinpäätös]] ) which contains naturally | ||
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:** Textform description of businesses activities ( [[w:fi:toimintakertomus]] ) | :** Textform description of businesses activities ( [[w:fi:toimintakertomus]] ) | ||
== Income statement or profit and loss statement == | |||
:* '''[[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 ) | :* '''[[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."'' | ::<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."'' | ||
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== Balance sheet == | |||
:* 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 ) | :* 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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---- | ---- | ||
---- | ---- | ||
= Accounting for a New Business 2 = | |||
Teacher: Heli Kortesalmi | |||
Type of course: [[:Category:Mandatory courses in GloBBA|Mandatory course in GloBBA]] | |||
Course code: N/A | |||
: | |||
Part of: ? | |||
Course material: ? | |||
Course | |||
Topics covered: | Topics covered: | ||
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* Annual percentage rate of charge for [[w:loans]] and [[w:credits]] | * Annual percentage rate of charge for [[w:loans]] and [[w:credits]] | ||
== Accounting for a New Business 2 - Lesson 1 - Financial flows == | |||
* '''[[w:cost-volume-profit analysis]]''' | * '''[[w:cost-volume-profit analysis]]''' | ||
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::Homework: ex. 4,5,6,7 | ::Homework: ex. 4,5,6,7 | ||
==== Accounting 2 | == Accounting for a New Business 2 - Lesson 2 == | ||
== Accounting for a New Business 2 - Lesson 3 - Pricing and costing == | |||
* '''[[w:Pricing]]''' | * '''[[w:Pricing]]''' | ||
:: Long-run vs. short-run pricing approaches | :: Long-run vs. short-run pricing approaches | ||
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*'''[[w:Cost-plus pricing]]''' is a pricing method used by companies to maximize their rate of returns. ( Wikipedia ) | *'''[[w:Cost-plus pricing]]''' is a pricing method used by companies to maximize their rate of returns. ( Wikipedia ) | ||
== Accounting for a New Business 2 - Lesson 4 - Business metrics == | |||
* '''[[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: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. | ||
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* '''[[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 ) | * '''[[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 for a New Business 2 - Lesson 5 == | |||
---- | ---- | ||
= Managerial Accounting = | |||
Teacher: Jaana Melamies | |||
Type of course: [[:Category:Mandatory courses in GloBBA|Mandatory course in GloBBA]] | |||
Course code: ACC2LF001 | |||
Part of: [[:Category:Independent courses in GloBBA]] | |||
Course material: ? + Moodle | |||
Course consists of mostly '''[[w:Managerial accounting]]''' and '''[[w:cost accounting]]''' | |||
# lesson: '''Cost behaviour''' and '''[[w:cost object|cost object]]s | # lesson: '''Cost behaviour''' and '''[[w:cost object|cost object]]s | ||
# lesson: '''[[w:Job costing|Job costing]]''' and '''[[w:overheads|overheads]]''' | # lesson: '''[[w:Job costing|Job costing]]''' and '''[[w:overheads|overheads]]''' | ||
# lesson: '''[[w:Cost-volume-profit analysis|Cost-volume-profit analysis]]''' | # lesson: '''[[w:Cost-volume-profit analysis|Cost-volume-profit analysis]]''' | ||
# lesson: '''Master budgets''' and '''operational [[w:budget|budget]]s''' | # lesson: '''Master budgets''' and '''operational [[w:budget|budget]]s''' | ||
# lesson: '''[[w:Activity based costing|Activity based costing]]''' | |||
# lesson: NO LESSON | # lesson: NO LESSON | ||
# lesson: '''Short term business decisions''' | # lesson: '''Short term business decisions''' | ||
== | == Managerial Accounting - Lesson 1 - Cost behaviour and cost objects == | ||
* '''A [[w:Cost object|Cost object]]''' is a tangible input for a product manufactured/service provided, like labor or material. ( Wikipedia ) | * '''A [[w:Cost object|Cost object]]''' is a tangible input for a product manufactured/service provided, like labor or material. ( Wikipedia ) | ||
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* '''[[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 ) | * '''[[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 ) | ||
== | == Managerial Accounting - Lesson 2 - Job costing and overheads == | ||
* 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 ) | * 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 ) | ||
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== | == Managerial Accounting - Lesson 3 - 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 ) | |||
Recap | |||
* '''[[w:cost-volume-profit analysis]]''' | |||
* '''[[w:Contribution margin]]''' | |||
* '''[[w:Break-even]]''' | |||
* '''[[w:Margin of safety]]''' | |||
* '''[[w:Operating leverage]]''' from [[Accounting#Accounting 2 class week 14]] | |||
*'''[[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 ) | |||
== | == Managerial Accounting - Lesson 4 - Master budgets and operational budgets == | ||
* 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 ) | * 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 ) | ||
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* '''Expenditure budget''' – includes spending data items. ( Wikipedia ) | * '''Expenditure budget''' – includes spending data items. ( Wikipedia ) | ||
== Managerial Accounting - Lesson 5 - Activity based costing == | |||
'''[[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: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 ) | ||
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* '''[[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 ) | * '''[[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 ) | ||
== | == Managerial Accounting - Lesson 6 - Short term business decisions == | ||
'''Short term business decisions''' | '''Short term business decisions''' | ||
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:::*'''''short-term''''' usually under 1 year. ( Wikipedia on [[w:Term (time)|Term]] ) | :::*'''''short-term''''' usually under 1 year. ( Wikipedia on [[w:Term (time)|Term]] ) | ||
Key terminology for short-term business decisions: | |||
* In [[w:economics|economics]] and business decision-making, a '''[[w:sunk cost|sunk cost]]''' is a [[w:retrospective|retrospective]] (past) [[w:cost|cost]] that has already been incurred and cannot be recovered. ( Wikipedia ) | |||
* '''incremental analysis''' | |||
* In [[w:Microeconomics|microeconomic theory]], the '''[[w:opportunity cost|opportunity cost]] of a choice''' is the [[w:value (economics)|value]] of the best alternative forgone, in a situation in which a choice needs to be made between several [[w:mutually exclusive|mutually exclusive]] alternatives given limited [[w:resource|resource]]s. | |||
* '''avoidable [[w:cost|cost]]''' <- read this | |||
* '''[[w:price taker|price taker]]''' vs. '''price setter''' | |||
* '''Pricing''' is the process of determining what a company will receive in exchange for its product. Pricing factors are [[w:manufacturing cost]], market place, competition, market condition, [[w:brand|brand]], and quality of product. Pricing is also a key variable in [[w:microeconomic|microeconomic]] price allocation theory. ( Wikipedia ) | |||
* '''[[w:pricing|pricing]]''' and '''costing''' | |||
** '''[[w:target costing|target costing]]''' is a [[w:pricing|pricing]] method used by firms. ... 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|profit margin]] from that product at a particular selling price. ( Wikipedia ) | |||
** '''[[w:cost-plus pricing|cost-plus pricing]]''' is a '''[[w:pricing strategies|pricing strategy]]''' companies use to maximize their rates of return. Firms may accomplish their objective of [[w:profit maximization|profit maximization]] by increasing their production until [[w:marginal revenue|marginal revenue]] equals [[w:marginal cost|marginal cost]] and then charging a price which is determined by the [[w:demand curve|demand curve]]. ( Wikipedia ) | |||
::: The MR == MC assumption is very unecological often. Assumes we are not sharing a limited planet ( jubo-jubo ) | |||
* '''Return on investment''' (%) = (Net profit / Investment) × 100 ( Wikipedia ) | |||
:::'''[[w:Return on investment|Return on investment]]''' ('''ROI''') is the concept of an [[w:investment|investment]] of some resource yielding a benefit to the investor. A high ROI means the investment gains compare favorably to investment cost. As a performance measure, ROI is used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. ( Wikipedia ) | |||
* '''product mix considerations''' | |||
* '''[[w:Outsourcing|Outsourcing]] (make or buy decision)''' is the [[w:contract|contract]]ing out of a business process to a third-party. ( Wikipedia ) | |||
:::The term "outsourcing" became popular in the United States near the turn of the 21st century. ( Wikipedia ) | |||
:::Outsourcing sometimes involves transferring employees and assets from one firm to another, but not always. ( Wikipedia ) | |||
* '''[[w:Total absorption costing|Total absorption costing]]''' (TAC) is a method of [[w:Accounting cost|Accounting cost]] which entails the full cost of manufacturing or providing a service. | |||
:::TAC includes not just the costs of materials and labour, but also of all manufacturing overheads (whether ‘fixed’ or ‘variable’). | |||
:::The cost of each cost center can be direct or indirect cost. The direct cost can be easily identified with individual cost centers. whereas the indirect cost cant be easily identified with the cost center. | |||
:::The distribution of overhead among the departments is called '''[[w:apportionment|apportionment]]'''. ( Wikipedia ) | |||
---- | ---- | ||
= Further reading = | |||
* [[Finance]] | * '''''[[w:A Guide to the Business Analysis Body of Knowledge|A Guide to the Business Analysis Body of Knowledge]]''''' ('''BABOK''') is the written guide to the collection of '''[[w:business analysis|business analysis]]''' knowledge reflecting current best practice, providing a framework that describes the areas of knowledge, with associated activities and tasks and techniques required.<ref>[http://www.iiba.org/IIBA/Professional_Development/Business_Analysis_Body_of_Knowledge/IIBA_Website/Professional_Development/Business_Analysis_Body_of_Knowledge_pages/Business_Analysis_Body_of_Knowledge.aspx ''Business Analysis Body of Knowledge''], from the [[w:International Institute of Business Analysis]]</ref> ( Wikipedia ) | ||
* '''[[Finance]]''' | |||
---- | ---- | ||
= Learn more in Wikipedia = | |||
:* '''[[w:Category:Accounting terminology]]''' | :* '''[[w:Category:Accounting terminology]]''' | ||
: '''[[w:analysis#Business|Business and investment analyses]]:''' | : '''[[w:analysis#Business|Business and investment analyses]]:''' | ||
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:build upon understanding of accounting and business math terminology and procedures. | :build upon understanding of accounting and business math terminology and procedures. | ||
= Navboxen = | = Navboxen = | ||
== Accounting software == | == Accounting software == | ||
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== Financial ratios navbox == | == Financial ratios navbox == | ||
{{Financial ratios}} | {{Financial ratios}} | ||
= References = | |||
<references/> | |||
[[Category:realcontent]] | |||
[[Category:Mandatory courses in GloBBA]] | |||
[[Category:First year studies in GloBBA]] | |||
[[Category:Independent courses in GloBBA]] |