Business accounting

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Business accounting program for senior high school. study for basic and standard as students.

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Business accounting

  1. 1. Copyright © 2007 Prentice-Hall. All rights reserved 1 Business and Accounting Chapter 7
  2. 2. Copyright © 2007 Prentice-Hall. All rights reserved 2 Balance sheet Terms 1. Assets - all the things that the business 'owns'. 2. Fixed assets - all the things a business owns but which are not used up in production. 3. Current assets - all the things a business owns which are used up in production. 4. Liabilities - refers to the money the business owes to other people.
  3. 3. Copyright © 2007 Prentice-Hall. All rights reserved Assets (Harta) 1. Fixed Assets: Things owned by the business that will last for more than one year and are not used up in production. In our example, the fixed assets will be the things like the shed, the boxes, the moneybox and the coats. 2. Current Assets: Things owned by the business that will be kept for less than one year and which are used up in production. These might be raw materials and stocks of goods used in production. In our example the fruit we have each day will be our current assets. 3
  4. 4. Copyright © 2007 Prentice-Hall. All rights reserved 1. Long-term liabilities: Money owned by the business that will not have to be paid back within the next year. 2. Short-term liabilities: Money owed by the business, which has to be paid back within a year. In our example, the money borrowed from your parents represents your short-term liabilities. 4 Liabilities (Kewajiban)
  5. 5. Copyright © 2007 Prentice-Hall. All rights reserved Balance Sheet 5
  6. 6. Copyright © 2007 Prentice-Hall. All rights reserved 1. Working Capital Sum of money that used to pay short-term debts 2. Net assets : The net value of all the assets owned by the business 3. Capital Employed : Total long term and permanent capital of the business which hasbeen used for the net assets of the business 6
  7. 7. Copyright © 2007 Prentice-Hall. All rights reserved 1. Gross Profit Margin: the gross profit divided by turnover (sales revenue) 2. Net Profit Margin: Net profit divided by turnover (sales) Gross profit is the difference between turnover and the cost of sales. Net profit is the difference between turnover and the total costs - that includes overheads. 7
  8. 8. Copyright © 2007 Prentice-Hall. All rights reserved 1. Return on Capital Employed There is one other commonly used accounting ratio that is used at this level - the Return on Capital Employed, or ROCE. ROCE is useful is helping us see how efficient the business is in using its assets to generate profit. To calculate the ROCE, remember that we need to divide the profit by the total capital employed by the business. The ratio tells us something about the way the business spends its money and how effective it is in using that spending to generate profit - which, after all, is a major aim of many private sector businesses! (Which profit measure do we use, however? Gross or net?) At this level, we can assume that our capital employed is the total of our assets, which we can get from the balance sheet. 8
  9. 9. Copyright © 2007 Prentice-Hall. All rights reserved 9

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