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Diapos Flashcards

(104 cards)

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1
Q

Accounting

A

Financial statement provide a synthesis of the performance of the firm in terms of wealth or value creation

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2
Q

Accounting for what?

A

A means of information of stakeholders

A means of calculating tax base

A means of proof in case of dispute

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3
Q

For who?

A

Everyone

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4
Q

Scope of an accountant’s work

A

Records the transaction

Respecting the regulatory framework

Produce summary financial statements

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5
Q

Characteristics of financial accounting

A

Strict methods : PCG USGAAP IAS-IFRS

obligatory

Obtain consistent info on a national level

Public info

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6
Q

Financial statements

A

Balance sheet
Income statement
Notes to the account

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7
Q

Frequency of reporting

A

At least 12 months

But can be established for any period

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8
Q

Role of the balance sheet

A

Presents the financial position of the company (wealth)

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9
Q

Liabilities

A

How is the company financed ?

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10
Q

Assets question

A

What does the company do with its ressources

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11
Q

2 categories of assets

A

Fixed assets : over the long term

Current assets : frequently renewed

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12
Q

2 categories of liabilities

A

Shareholders equity

Liabilities

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13
Q

Fundamental equation

A

Assets = liabilities + shareholders equity

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14
Q

Role of the income statement

A

Measures the performance of the company over a period of time

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15
Q

Income

A

Increase in the value of the company over a period of time

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16
Q

Expense

A

Reduction in the value

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17
Q

Net income

A

It’s performance

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18
Q

Net income

A

Income - expenses

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19
Q

Income and expenses are

A

Accounted for when earned or incurred

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20
Q

Présentation french income statement

A

Expenses : operating financial extraordinary items

Income: operation ….

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21
Q

Autre présentation

A

Operating

Finance

Extraordinary expenses

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22
Q

International presentation

A

Revenue

Expenses

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23
Q

Role P&L avec BS

A

Lien entre BS du 31/12N-1 et BS du 31/12/N

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24
Q

The note to the accounts

A

Compulsory doc giving explanations of contents of certain balances, valuation methods ..

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25
Acquisition cost
Sum of : - purchase price excluding tax - custom duties and non recoverable taxes - transport costs, installation, site restoration...
26
Objective depreciation
Loss in value of a fixed asset caused by the passage of time and use of the asset
27
Depreciation charges
Non cash expenses
28
Fixed asset not depreciated
Trademarks | Financial instruments
29
Méthode de calcul dépréciation
Base / economic life x les jours restants /360
30
Financing of investments
- classic bank loan from a credit institution - self financing - bond issue - investment grants
31
Reimbursement of the loan
Yearly payments = debt payments + interest Yearly: reduction in the bank account Debt : reduction in the loan account Interest: increase in the interest expense account
32
Stocks of raw materials in income statement
Purchases Consumption
33
Stock of finished product in income statement
Sales Production
34
In the I/S consumption
Purchases + OS - CS = purchases + movement in stock of rm
35
Production in IS
Sales + CS-Os = sales + change in stocks
36
Objectives of adjusting entries = end of period adjustments
To account for expected losses : principle of prudence
37
In the case of indication of loss of value of a fa
Asset impairment test
38
Expected loss within assets
Impairment of assets
39
Expected loss within liabilities
Provision for liabilities and charges
40
Cost
Monetary measure of the ressources consumed in order to carry out an activity
41
Cost object
Any item for which a separate measure of costs is desired
42
Purpose of CMS
To collect accumulate and classify costs into categories | —> help managers to make decisions
43
Costing means
Choosing
44
A cost is
An opinion
45
Scope of a cost
Total list of expenses that we choose to take into account in order to calculate the cost
46
Why do we compute costs
``` To set prices Compute margins by destination Value inventories Determine standard costs Measure performances ```
47
Why do we analyse costs
To understand the internal functioning of an organisation : looking in the black box + cause effect relationships
48
Black box
Transformation process
49
Assignable costs
Expenses that are recorded in the books and that are used in costs measurements in management accounting
50
Non assignable costs
Expenses that are recorded in the books and that are NOT used in costs measurements in mana accounting
51
Additional costs
Not recorded in the books but that qualify for costs measurements in mana accounting
52
Management accounting def
Make better decision | Improve the efficiency and effectiveness of existing operations
53
Cost behaviour
Variable or fixed costs
54
Cost assignment
Direct and indirect costs
55
Cost timing
Standard costs | Actual costs
56
Variable cost
If the total amount of the costs varies in DIRECT PROPORTION to changes in the level of activity
57
Exemple variable costs
Materials Electricity Sales commissions Outward transposition
58
Fixed costs
Not affected by changes in the level of activity
59
Fixed costs examples
Depreciation of machine Workers salaries / representatives Rent of stores
60
Direct cost
Specific cost directly attributable to that costs object without d’ajustement, intermediary calculation
61
Indirect cost
Not specifically related to a cost object Calculation needed Ajustement Ex: salariés if supervisors
62
Ex of direct costs
Materials Direct labour Sales Commissions Depreciation of a single product machine
63
Indirect
Electricity Supervision Depreciation of a multi product machine Rent
64
Actual cost
Based on actual expenses incurred
65
Standard cost
Estimates | Objective value
66
Coût marginal
Coût supplémentaire induit par la dernière unité produit
67
Long term MC
Unit VC + potential new fixed costs
68
Acquisition cost
Purchase price of materials + supply expenses
69
Manufacturing cost
Acquisition cost of materials + production expenses
70
Non manufacturing costs
Selling expenses Administrative costs
71
Cost of good sold
Manufacturing cost of goods manufactured + non manufacturing costs
72
Partial coating
Margin | Diff berserk the sales revenue and one of its partial cost
73
Income
Full costing | Diff between sales revenue and its total cost
74
Contribution margin
Sales revenue - VC
75
Analytical come
Cm- fixed costs
76
CVP analysis
Method for examining the relationship between : - changes in the level of activity - changes in sales revenues (costs and profits)
77
Objective of cvp analysis
Determine the revenue mix to maximise income
78
Break even point
Mini quantity we need to sell to make a profit | When AI=0
79
Margin of safety
Excess of budgeted sales over break even revenues | =sales - break even point
80
If loss due to low volumes
Increase the unit selling price Reduce the unit variable cost Reduce total fixed costs
81
Indifference threshold Q
Analytical 1= analytical 2
82
Contribution per unit of limiting factor =
Contribution margin / limiting factor consumed
83
Determine the product mix to
Maximise income
84
Short term pricing
SPu>VCu
85
Short term pricing limitations
Fixed costs and unit variable costs must not be impacted by the decision Consider impact on competition and customers Cm remain positive
86
Advanced contribution margin
Sales revenues must cover variable cost and DFC Cm-DFC
87
Specific breakeven point
Volume for which the direct F.C. are covered Advc=0 Q= DFC/Cmu
88
Advanced contribution margin method
Criteria for closing or discontiniation decisions
89
Full cost calculation
Dc + share of indirect costs allocated to that cost object
90
Issues with indirect costs allocation
Causality: causal relationship has to be identified Homogeneity : pooling of costs that have the same behaviour are necessary
91
Overhead allocation rate
= IC to be allocated/total quantity of allocation bases
92
IC to be allocated to a cost object
Q of allocation bases consumed by this cost object x overhead allocate rate
93
Long term capital
Shareholders equity Long term financial liabilities Loans Bond payable
94
Negative cash
Bank overdraft
95
WC
LTC - FA
96
Ça
Stocks Accounts receivable Other receivables
97
WCR
CA - CL
98
NC
+cash- cash
99
Cash équation
NC = WC-WCR
100
Ebit
Income generated from the activity
101
Means needed to develo the activity
CE capital employed
102
roce
Measure profitability
103
Drivers to improve profitability or operations performance
Operating margin CE turnover
104
CE
Nfa + WC

Finance (3 decks)

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