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Accounting Exam > Complete exam revision deck (all lectures) > Flashcards

Complete exam revision deck (all lectures) Flashcards

(58 cards)

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1
Q

List GPFS

A
  • Statement of cash flows
  • Balance sheet
  • Income statement
  • Statement of changes in equity
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2
Q

ASX stands for and purpose…

A

Australian Securities Exchange: protect investors

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3
Q

ASIC stands for and purpose…

A

Australian Securities and Investment commission: protect consumers, investors and creditors by enforcing company and financial service laws

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4
Q

ACCC stands for and purpose…

A

Australia Competition & Consumer Commission: protect consumers

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5
Q

RBA stands for and purpose…

A

Reserve Bank of Australia: set monetary policy

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6
Q

ATO stands for and purpose…

A

Australian Taxation Office: collects taxes

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7
Q

Equity is…

A

Equity is the true value of Assets after all the liabilities have been paid off.

Equity = Assets - Liabilities

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8
Q

List the 4 Theories of business sustainability

A
  1. Corporate social responsibility
  2. Shareholder value
  3. Stakeholder theory
  4. Stewardship theory
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9
Q

Theory: Corporate social responsibility is…& reason

A

the responsibility an entity has to all stakeholders, including society and the environment in which it operates in.

Reasons: it’s profitable to do so and it reduces to interference from government and lobby groups.

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10
Q

Theory: Shareholder value is…

A

Shareholder (owner) returns are the primary focus of an organisation.

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11
Q

Theory: Stakeholder theory is…

A

The purpose of the entity is to work for the good of all stakeholders - not just maximise shareholder wealth.

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12
Q

Theory: Stewardship theory is…

A

Directors act in the interest of a group(s) of stakeholders and not shareholders.

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13
Q

Triple bottom line refers to…

A
  • Economic performance
  • Environmental performance
  • Social performance
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14
Q

2 Ethical theories are…

A
  • Teleological theory = consequences of decisions.

- Deontological theory = examine the decisions and actions in terms of morality.

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15
Q

Assets =

A

Liabilities + Equity

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16
Q

(DEBIT) Assets + Expenses =

A

Liabilities + Equity + Revenue (CREDIT)

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17
Q

Current is…

A

Anything within 12 months

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18
Q

Non-current is…

A

Anything longer than 12 months

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19
Q

Profit =

A

Revenue - Total cost

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20
Q

Total cost =

A

Variable cost + Fixed cost

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21
Q

GAAP stands for…

A

Generally Accepted Accounting Principles

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22
Q

Accrual accounting is…

A

Accrual accounting is a system in which transactions and events are recorded in the periods they occur.

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23
Q

Cash accounting is…

A

Cash accounting is a system in which transactions and events are recorded in the periods the entity receives or pays the related cash.

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24
Q

Cash flow statements enables… & provides…

Study These Flashcards
A

…enables the evaluation of an entity’s ability to generate positive cash flows in the future, pay dividends and finance growth.
…provides a summary of cash and types of cash flows in and out of an equity

25
Financial analysis is...& assists...
...is assessment of an entity's financial position and profitability. ...assists users in decision making
26
A Budget is..
Is the quantitative expression of an entity's plan.
27
A Cash budget is...
A statement of expected future cash receipts and payments.
28
Variance is..
A comparison of actual cash number and budget numbers, the difference between the two is known as variance. - Favourable variance = (F) - Unfavourable variance = (U)
29
(Formula) Variance =
Budget number - Actual number
30
Fixed costs are...
Fixed costs are cost which remain the same in total (given range of activity and time-frame) irrespective of the total level of activity. Example = Lease costs, Bills, Utility
31
True or False: Fixed costs per unit will decrease as the number of units produced increase..
True
32
Viable costs change ..
Change in total as the level of activity changes. Example = cost of bricks to build a house
33
Break-even occurs...
when total revenue and total costs are equal resulting in zero profit. i.e. when revenue = FC+VC
34
Break-even (units) =
FC / CM
35
Contribution margin =
Revenue - VC
36
Units to earn a desired profit =
(FC + expected profit / CM per unit) = x sales units
37
Pre-tax profit =
After-tax profit / (1 - tax rate)
38
Pre-tax profit example: to make a profit of $50,000 after 30% tax, you will need to make a pre-tax profit of =
50,000 / (1-0.30) = $71,428
39
Target pre-tax profit =
(FC + pre-tax profit target / CM per unit) = x sale units
40
Contribution margin ratio =
CM / Total sales
41
Margin of safety provides ...
an indication of how much revenue can decrease before reaching the break-even point.
42
Margin of safety =
Actual or estimated units or revenue - Units or revenue at break even
43
Make or buy decision requires =
An entity to choose whether to make or buy a product or service OR to outsource the production of that product.
44
Cost drivers provide...
a measure of activity that explains the cost object's use of the indirect cost.
45
Cost drivers can be classified as ...
- Volume drivers - Resource drivers - Activity drivers
46
Volume drivers relate to..
Volume drivers relate to volume of output. | E.g. labour hours, machine hours
47
Resource drivers measure..
resource consumption by activities.
48
Activity drivers can be..
either volume or non-volume related.
49
Cost-based pricing applies..
Applies a mark-up to some calculation of product or service cost. Cost to make product + mark up
50
Market-based pricing is based on...
measure of customer demand.
51
Peak load pricing example =
Flowers industry on valentines day.
52
Price skimming example =
Highest prices when new product is released.
53
Penetration pricing is..
when companies price products significantly less than their competitors.
54
ARR =
(Average profit / Average investment) * 100
55
NPV =
CF1/(1+r) + CF2/(1+r) ...INV
56
Internal rate of return (IRR) =
0 = -INV + CF1/(1+i)^1 + CF2/(1+i)^2 ...
57
An entity is often divided into business units known as segments or divisions to..
- localise decision making - free central management time for strategic planning tasks - Assign responsibility and local authority
58
Can you provide an example of a short and long term finance option?
- Selling more shares | - Buy assets in aim of helping business

Accounting Exam (2 decks)

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