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Accounting lecture
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Accounting lecture

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Accounting lecture Presentation Transcript

  • 1. Chapter 12: Accounting
  • 2. identifying, measuring, and communicating financial information to provide interested parties information necessary to make good decisions
  • 3. data?
  • 4. information?
  • 5.  
  • 6.  
  • 7. SO?!?
  • 8. what context do we need to make data meaningful?
  • 9. price-cost/price = margin price x sales = revenue cost x sales = CGS revenue-CGS = gross profit
  • 10. Managerial Accounting (insider information)
    • cost accounting
    • planning
    • controlling
    • tax accounting
  • 11. Financial Accounting (outsider information)
    • annual report
    • private accountant (in-house)
    • public accountant (clients on a fee basis)
    • Financial Accounting Standards Board (FASB)
      • Generally Accepted Accounting Practices (GAAP)
  • 12.  
  • 13. Auditing: reviewing and evaluating records
    • independent audit: accuracy of company’s financials
    • internal audit
  • 14. Tax Accounting
    • trained in tax law
    • prepares tax returns
    • prepares tax strategies
  • 15. Balance Sheet: shows profits & losses as of specific date
    • Fundamental Accounting Equation
    • Assets = Liabilities + Owners’ Equity
  • 16. Tangible Assets
    • fixed assets (property, plant & equipment PPE)
      • land
      • buildings & improvements
      • equipment
      • vehicles
      • furniture & fixtures
  • 17. Tangible Assets
    • current assets (can be converted to cash w/in one year)
      • raw materials
      • work in progress
      • finished inventory
      • accounts receivable
  • 18. Intangible Assets
    • goodwill
    • intellectual property
      • Trademarks
      • Copyrights
      • Patents
      • Trade secrets
  • 19. Liabilities
    • current liabilities (due in less than one year)
      • accounts payable
    • long-term liabilities (due in one year or more)
      • notes payable
      • bonds payable
  • 20. Income Statement
    • shows cash flows over a certain period
    • revenue - CGS = gross margin
    • gross margin - operating expenses = net income before taxes
    • net income before taxes - taxes = net income (loss)
  • 21. Liquidity Ratios
    • current ratio: current assets / current liabilities
    • acid-test (quick) ratio: (cash +marketable securities+receivables) / current liabilities
  • 22. Debt (Leverage)
    • debt: total liabilities / total assets
    • debt to OE: total liabilities / owners’ equity
  • 23. Profitability
    • EPS: net income after taxes / number of shares outstanding
    • return on sales: net income / net sales
    • return on equity: net income after tax / owners’ equity
  • 24. photo credits
    • Accountant upstairs: http://www.flickr.com/photos/jahdakinebrah/
    • Accounting the old way: http://www.flickr.com/photos/genbug/