Semestre 1- Principes Flashcards
(88 cards)
1
Q
Financial accounting
A
Info describing the financial ressources at a point in time
Financial position
Helps investors and creditors
2
Q
Management accounting
A
Development and interpretation of accounting info
Assist mamangement
3
Q
Tax accounting
A
Financial + management accounting
Complies with légal requirements
4
Q
The cost of producing accounting info
A
The value of the info produced should exceed the cost of producing it
5
Q
Basic functions of ana counting system
A
Interpret the effect of business transaction
Classify the effects of similar transaction
Summarise and communication the info
6
Q
Component of internal control
A
- ctrl environnement
- risk assessment
- info and communication
- monitoring activities
- ctrl activities
7
Q
Financial statements
A
- statements of financial position : balance sheet
- income statement
- statement of cash flow
8
Q
Income statement
A
Activity statement that shows revenues and expenses
9
Q
Statement of cash flows
A
Investment and credit context
10
Q
Assets
A
What does the company do with its ressources
- fix assets: more than a year horizon
- current assets : on going change
11
Q
Current assets
A
Inventories
Equipment
Software
Real estate
12
Q
3 sections in BS
A
- assets
- liabilities
- owner’s equity
13
Q
Cost Principle
A
Use of original cost and no market values
14
Q
The going concern assumption
A
A business is a contributing entreprise
15
Q
Accounts payable
A
Do not involve a written promises
Don’t call for interest payments
16
Q
Note payable
A
Formal
Written promise to repay
17
Q
Owners equity
A
- captal stock
- retained earnings : total assets - total liabilities
18
Q
Formule assets
A
Liabilities + owners equity
19
Q
Income statement components
A
- sales
- cost of good sold
- gross loss/profit on sales
- less: administrator and selling expense
- net income : gross profit- less
20
Q
Statement of cash flows ; 3 categories
A
Operating activities
Investing activities
Financing activities
21
Q
Operating activities
A
Revenue + expense transaction
22
Q
Investing
A
Purchasing + selling assets
Land and building
23
Q
Financing activities
A
The owners investing in the company + creditor loaning
24
Q
Cash in BS
A
Current Asset
25
Commercial premise in BS
Fixed assets
26
Stock of good for resale
Current Asset
27
Items that are not revenues or expenses in the income statement
- investment by stockholders
- loan from bank
- purchase of land
- payment to long term creditors
28
Benchmark studies
Study designed to show a company how it’s costs and processes compare to others
29
Management accounting systems
Provide past current future oriented info to shareholders
30
3 types of manufacturing costs
Direct materials
Direct labour
Manufacturing overhead
31
Manufacturing costs in the BS
Current assets
32
Manufacturing costs and income statement
When sold —> transferred to the IS as cost of good sold
33
Product cost
Manufacturing costs
34
Period cost
Operating expenses : selling expense, general and administrative, interest, income
35
3 inventories of a manufacturing business
- material inventory
- work in process inventory
- finished goods inventory
36
Material inventory
Raw materials available for use in manufacturing process (cost based on its purchase price)
37
Work in process inventory
Goods on which Y activités have started but not completed
—> current asset
38
Finished goods inventory
Unsold finished products available for sale
—> current asset
39
Manufacturing overhead
Payment of indirect labour
Factory utilities
Recording of depreciation on factory assets
Purchase of indirect materials
—> indirect cost
40
Direct cost
Manufacturing costs that can be traced directly into the quantity of finished goods manufacturing overhead
41
Financial accounting
- mandatory
- accounting standards
- externally oriented
- expenses sorted by nature
- past info
- years and quarters
42
Management accounting
- optional
- don’t follow standard
- internally oriented
- expenses sorted by destination
- past and future info
- frequency : ad hoc
43
Variable costs
The total amount of the cost varies in direct proportion to changes in the related level of activity
Materials, electricity, direct materials, direct labour
44
Stage of the supply-production sale
Acquisition cost
Manufacturing costs
Non manufacturing costs
45
Objective of a CVP analysis
Determine the revenue mix to maximise income
Short term analysis
46
Bank in BS
Current assets
47
Account receivable in BS
Current assets
48
Office furniture in BS
Fixed Assets
49
Profit in BS
Owners equity
50
Loan in BS
Liabilities
51
Fixed costs
```
Administrative
Executive salaries
Property taxes
Rents
Leases
Insurance protection
```
52
Semi Bariable costs
Fixed + variable components
53
As a volume increase fixed costs
- per unit: decrease
| - total: remain the same
54
As the volume increase variable costs
- stay the same per unit
| - increase
55
When employees work overtime
Additional cost behaviour
56
Long term liabilities
Outdone&reserves
Sharecapital
LT debt
Share holders equity
57
Current
< 1 year
58
Simplified statement of financial position : asses
FA
CA
positive cash
59
Simplified of financial position : liabilities
LTC
CL
negative cash
60
Negative cash
Bank overdraft
61
WC
What is the balance between the money bought in the company and how it has been used ?
62
If wc >0
You can finance day to day operation with LTC
63
If wc<0
You must borrow at short term
| Cannot finance FA i their entirety
64
If WCR <0
CL finance ÇA
| EWCESS OF FINANCIAL FUNDS
65
If WCR>0
No
| A part of Ça Financing by LTC and/or negative cash
66
Manufacturing company
| Simplified financial statement
WC>0 and WCR <0
67
Retail company
WCR<0 and NC <0
68
Atypical riski cases
Wc<0 and NC <0
If WCR >0 extremely risky
69
How to improve ROCE
improving the operating margin ratio
And/or
Improving the CE turnover
70
How to improve the operating margin ratio?
Optimise the sales : selling prices
Reduce costs
Arbitrate : make or buy ; internal vs external
71
How to improve the CE turnover
Optimise the fixed assets management
Optimise the working capital management
72
Objectives of the cash flows statement
To report cash inflows and cash outflows
To classify cash flows
73
Operating activities
= net income + depreciation and provision - write-back of depreciation and provision
- gain on sale of FA
+ loss on sale of FA
- variation in WCR
74
Investing activities
= sale of FA - purchase of FA
75
Financing activities
Receipts coming from shareholders or financial partners (bank)
From the payments of dividends for shareholder and repayment of debt for financial partners
76
Operating margin ratio
To which extent do we generate sales out of the CE basis
77
CE ratio
How profitable sales are
78
Income statement begin with
VC
79
Plus le ROCE est élevé
plus il est intéressant d’investir
80
ÇA
Stocks
Accounts receivable
Other receivable
81
LTC
Shareholder’s equity
| Long term financial liabilities
82
CL
Short term financial liabilities
83
Operating acivities
Dividend received
Interest paid + received
Cash paid to suppliers and employees
Income taxes paid
84
Invzst je activitiesb
Marketable securities
Loans
Plant assets
85
Financing activities
```
Short term borrowing
Short term debts
Bonds payable
Capital stock
Dividend paid
```
86
Cash paid to suppliers and employees
Purchase of merchandise
Cash paid for operating expenses
87
Purchase of merchandise
Cost of goods sold + increase in inventory / - decrease in inventory + decrease in accounts payable /- increase in accounts payable
88
Cash payments for expenses
Expenses - depreciation and other noncash expense + increase in related prepayments /- decrease in ... + decrease in related accrued liabilities/- increase in related accrued liabilities
