Chap 1

Question 1

Accounting?

Answer 1

is concerned with collecting, analysing, communicating financial information.

Question 2

Ultimate aim of Acc?

Answer 2

is to help those using this information to make more informed decisions.

Question 3

The managers need accounting information to decide whether to? (5 ý)

Answer 3

1. develop new products or services
2. increase or decrease the price or quantity of existing products or services
3. borrow money to help finance the business
4. increase or decrease the operating capacity of the business
5. Change the methods of purchasing, production or distribution

Question 4

Vd cho develop new products or services?

Answer 4

(As with a computer manufacturer developing a new range of computers)

Question 5

Vd cho increase or decrease the price or quantity of existing products or services?

Answer 5

(As with a telecommunications business changing its mobile phone call or text charges)

Question 6

Vd cho borrow money to help finance the business?

Answer 6

(As with a supermarket wishing to increase the number of stores it owns)

Question 7

Vd cho increase or decrease the operating capacity of the business?

Answer 7

(As with a beef farming business reviewing the size of its herd)

Question 8

Vd cho change the methods of purchasing, production or distribution?

Answer 8

(As with a clothes retailer switching from UK to overseas suppliers)

Question 9

Others outside the business need financial information to decide whether to? (3 ý)

Answer 9

1. invest or disinvest in the ownership of the business
2. lend money to the business
3. offer the credit facilities.

Question 10

Vd cho invest or disinvest in the ownership of the business?

Answer 10

(For example, investors who buy or sell shares)

Question 11

Vd cho lend money to the business?

Answer 11

Banks providing loan

Question 12

Vd cho offer the credit facilities.

Answer 12

Suppliers of goods or services offering delayed payment

Question 13

Finance (or financial management)?

Answer 13

is concerned with the ways in which funds for business are raised and invested. (cái ni nằm at the heart of business)

Question 14

Bản chất của Finance

Answer 14

In essence, business raises funds from investors (owners and lenders) -> make investments (in equipments, premises, inventories,..) với mục đích làm cho business vs owners giàu hơn. Funds cần được raised phù hợp với nhu cầu của business

Question 15

Understanding of finance helps in identifying (4 ý)

Answer 15

• The main forms of finance available
• The costs and benefits of each form
• The risks associated with each form
• The role of financial markets in supplying finance

Question 16

Understanding of finance helps in evaluating (2 ý)

Answer 16

• The returns from that investment

- The risk associated with that investment

Question 17

Why does the quality of the investment decisions have profound impacts on the fortunes of the business?

Answer 17

Because business tends to raise and invest funds in large amounts for long periods of time.

Question 18

There is a considerable overlap between the 2 subjects

Answer 18

Vd Acc reports are a major source of information for financing and investment decisions making.

Question 19

Main users of financing/ acc of information relating to a business? (10 người)

Answer 19

• Customers
• Competitors
• Managers
• Owners
• Community representatives
• Employees and their representatives
• Government
• Investment Analysts
• Lenders
• Suppliers

Question 20

Qualities that influence usefulness of Accounting information (7 cái)

Answer 20

• Reliability
• Relevance
• Understandability
• Comparability
• Verifiability
• Timeliness
• Cost straint

Question 21

Nội dung đặc tính Relevance?

Answer 21

• Acc info must be relevant to the prediction of futures events (vd profits next year là nhiu) or relevant in confirming past events (vd profits earned last year). (2) quan trọng vì users cần check accuracy of earlier predictions mà họ have made để judge the accuracy of current predictions.
• To influence the decisions, acc info must be availabe when decisions are being made => Relevant info must be timely

Question 22

Nội dung đặc tính Reliability?

Answer 22

Acc must be free from significant error and bias. It should be relied on by managers để represent information.

Question 23

Problem của đặc tính Relevance vs Reliability?

Answer 23

Acc info which is highly relevant thì ko reliable và ngược lại. Khi strike the right balance between 2 cái ni thì needs of users should be overriding consideration.

Question 24

Nội dung đặc tính Comparability?

Answer 24

• Enable users to identify changes in the business over time (vd trend in sales revenue trong 5 năm)
• Also help users to evaluate the performance of the business in relation to similar business
• Đặc tính ni đạt được bằng cách treating items that are basically the same in the same manner for acc purposes.
• Đặc tính ni được enhanced by making clear the policies adopted in measuring and presenting the info.

Question 25

Nội dung đặc tính Understandability?

Answer 25

Acc reports should be expressed rõ ràng và những người mà the info aim at phải hiểu được

Question 26

Ngoài những đặc tính nớm acc info must also across the threshold of materiablity vì sao

Answer 26

Nếu 1 acc info is not material, nó ko nên đc bỏ vô reports vì it merely clutter them up and interfere with the users' ability to interpret the financial results.

Question 27

1 acc info mà hội tụ reliable, relevant, comparable, understood vs material vì sao đôi khi phải loại bỏ khỏi reports and thực tế phải chọn not to produce or discover the info?

Answer 27

- vì cost > potential benefit of having that info | => This cost-benefit issue will limit the amount of acc info provided

Question 28

Producing acc info is very costly. The costs are difficult to quantify. Kể tên các cost?

Answer 28

- Direct, out of pocket cost là salaries của mấy mẹ acc staff. Đây là the only part of the total cost involved. - Less direct cost such as the cost of user's time spent on phân tích và interpreting the info contained in the report.

Question 29

Features của acc info system?

Answer 29

1. Identify và capture relevant info ( financial info) 2. record, in a systematic way, the info collected 3. analyze và interpret the info collected 4. report the info in a manner that suit the needs of users => Info identification -> Info recording -> Info analysis -> Info reporting

Question 30

Main areas of differnces giữa management acc vs financial acc? (Slide 10/40 W1)

Answer 30

1. Nature of the report produced 2. Level of detail 3. Regulation 4. Reporting Interval FA thì 1 năm, nửa năm, 1/4 năm MA thì monthly, weekly, daily 5. Time orientation FA thì backward-looking, past info MA thì cả future vs past info 6. Range and quality of info

Question 31

Reasons dẫn tới scandal (obscure losses and inflate benefits)

Answer 31

- Pressure on managers to meet unrealistic expectations of investors for continually rising profits. - Do excutives tham (lương của mấy ngừi ni phụ thuộc vô financial performance)

Question 32

Result của scandals?

Answer 32

Undermine (huỷ) the credibility (sự đáng tin) của financial statement và tạo ra nhìu stricter regulations lquan tới financial info.

Question 33

Nội dung đặc tính Cost Straint?

Answer 33

Benefits of information must outweigh cost of producing it

Question 34

Nội dung đặc tính Verifiability?

Answer 34

Subjective judgement, evidence

Question 35

Trong quá khứ chỉ gather info cho manager. Now, Attitude and behaviour of customers and rival business là mục tiêu của info-gathering. Vì sao?

Answer 35

- Secure vs maintain the competitive ads over rivals mới successful - Để có ads ni thì business phải có customer driven (satisfy customer needs). Cái ni dẫn tới MA info includes details of customer vs market. Ngoài ra còn cần info of costs vs benefits của rivals (đc coi là benchmark-điểm chuẩn) để gauge competitiveness.

Question 36

Environment của business trở nên turbulent and competitive. Reasons? (6 ý)

Answer 36

1. The increasing sophistication of customers 2. The development of a global economy where national frontiers (lĩnh vực) become less important 3. Rapid changes in technology 4. The deregulation of domestic market (vd điện,ga,nc) 5. Increasing pressure from owners (shareholders) for competitive economic returns 6. Increasing volatility (tính ko ổn định) of financial markets

Question 37

Để xử cái turbulent and competitive environmet cần strategic management. Nội dung?

Answer 37

Cái ni provide purpose vs ensure action hopli để đạt đc purpose. Actions phải liên kết internal resources vs external environment of competitors, customers, suppliers,.. Phải take account of business strength vs weakness , opportunities offered (vd expand market) vs threats (vd đối thủ giảm giá hàng bán) posed by external environment

Question 38

Non-for-profit organisations?

Answer 38

Charities, churches, clubs and associations, uni, local government authorities, national government department, trade unions

Question 39

Important aspects of acc and finance?

Answer 39

1. How acc reports should be read and interpreted 2. How financial plans are made 3. How investment decisions are made 4. How businesses are financed