3. The fundamentals of financial accounting

2014 ◽  
Author(s):  
Christopher Nobes
Keyword(s):  
Cash Flow ◽  
Balance Sheet ◽  
Financial Statements ◽  
Cash Flows ◽  
Recording System ◽  
Financial Accounting ◽  
Income Statement ◽  
Basic Ideas ◽  
Double Entry ◽  
The Way

‘The fundamentals of financial accounting’ explores the basic ideas of financial accounting: the way accounting actually works, the logic behind the double-entry recording system, and the contents of the basic financial statements (balance sheet, income statement, and cash flow statement). The following questions are addressed: What does a balance sheet try to show? Why does it balance? How is it that any one transaction has two accounting effects? Which costs lead to assets and which lead to expenses? How do cash flows fit in? How can a profitable company go bust because of a lack of cash?

Minority Interest in the Consolidated Retained Earnings Statement

2001 ◽  
Vol 15 (2) ◽  
pp. 119-146 ◽  
Author(s):  
Hugo Nurnberg
Keyword(s):  
Cash Flow ◽  
Balance Sheet ◽  
Financial Statements ◽  
Cash Flows ◽  
Parent Company ◽  
Consolidated Financial Statements ◽  
Entity Theory ◽  
Income Statement ◽  
Cash Flow Statement ◽  
Retained Earnings

Consolidated financial statements purport to report income, financial position, and cash flows of a parent company and its subsidiaries as if the group were a single company with one or more branches or divisions. Under the parent company theory, the consolidated entity perspective assumed in the consolidated income statement, the consolidated balance sheet, and the consolidated retained earnings statement differs from the consolidated entity perspective assumed in the consolidated cash flow statement. Even under extant expositions of the entity theory, the consolidated entity perspective assumed in the consolidated income statement, the consolidated balance sheet, and the consolidated cash flow statement differs from the consolidated entity perspective assumed in the consolidated retained earnings statement. This paper develops a consistent consolidated entity perspective for all four consolidated financial statements. It demonstrates that under the entity theory, consolidated retained earnings includes the separate equities of both the parent company stockholders and the minority interest. As such, both elements of retained earnings should be reported in the consolidated retained earnings statement to make it comparable to the consolidated retained earnings statement of companies without subsidiaries or with only wholly owned subsidiaries. The effect on certain financial ratios of public companies may be substantial. The paper also demonstrates that for purchased subsidiaries, minority interest in consolidated retained earnings includes unamortized write-ups of identifiable net assets and goodwill arising from purchase-type business combinations.

scholarly journals Penyusunan Laporan Keuangan Pada Sumurboto Stationery Semarang Tahun 2016 Berdasarkan Sak Etap

2018 ◽  
Vol 1 (1) ◽  
Author(s):  
Lasa Laksita ◽  
Adilistiono Adilistiono
Keyword(s):  
Cash Flow ◽  
Balance Sheet ◽  
Accounting Standards ◽  
Financial Statements ◽  
Financial Accounting ◽  
Financial Statement ◽  
Public Accountability ◽  
Final Project ◽  
Income Statement ◽  
Cash Flow Statement

<p>Financial statement preparation is very important because it can <br />describe the finance of an entity and as a basis for decision making. The <br />purpose of this Final Project is to prepare the company's financial statements <br />consisting of Balance Sheet, Income Statement, Statement of Changes in <br />Equity and Cash Flow Statement based on Financial Accounting Standards of <br />Entities Without Public Accountability (SAK ETAP), with the result that assist <br />Sumurboto Stationery in preparing financial statements. Interview and <br />documentation are used in data collection method. On the other hand, this <br />Final Project used description and exposition method for the writing method. <br />The result of this Final Project is to gain the knowledge in how have <br />Sumurboto Stationery done their financial statement preparation in 2016 <br />based on Financial Accounting Standards of Entities Without Public <br />Accountability (SAK ETAP) that consisting of Income Statement, Statement of <br />Changes in Equity, Balance Sheet and Cash Flow Statement. Hopefully, <br />Sumurboto Stationery can be able to prepare their financial statement for the <br />next period in accordance with Financial Accounting Standards of Entities <br />Without Public Accountability (SAK ETAP)</p>

scholarly journals Analisis Penerapan SAK ETAP Pada BUMDes Luhur Sepakat Desa Sido Luhur Kabupaten Bengkulu Utara

2021 ◽  
Vol 1 (1) ◽  
pp. 19
Author(s):  
Zahrah Indah Ferina ◽  
Siti Rozalia ◽  
Merri Anitasari
Keyword(s):  
Comparative Method ◽  
Balance Sheet ◽  
Financial Statements ◽  
Cash Flows ◽  
Financial Accounting ◽  
Analysis Method ◽  
Balance Sheets ◽  
Financial Report ◽  
Income Statement ◽  
The Village

The purpose of this study is to examine whether the Financial Accounting Standards for Entities Without Public Accountability (SAK ETAP) in BUMDes Luhur Sepakat financial statements have gone well in accordance with SAK ETAP in which there are balance sheets, income statements, statements of changes in equity, statements of cash flows and records on the financial statements. BUMDes Luhur Sepakat is one of the BUMDes in Padang Jaya District. The initial capital source for the formation of BUMDes comes from the Village Budget (APB desa). To answer the problems regarding the application of financial statements, the data analysis method used in this study is a comparative method by comparing SAK ETAP and BUMDes Luhur Sepakat financial statements. The results of this study showed that the financial report of BUMDes Luhur agreed Sido Luhur Village has not matched the SAK ETAP. Balance sheet and Income statement are made correctly. BUMDes Luhur agreed not to make statements of cash flows, equity changes reports, and records of financial statements. The reporting of financial information continues to be done routinely, and the caretaker BUMDes Luhur agreed already accountable for the financial report with the deliberation to the community at the end of the year.

suits of operations. The ordres were linked together either by double-entry or by the use of contra-accounts. The plan's double­ entry systems were as follows [CNOF, 1946]: Financial accounting Ordre 1 — Operating accounts (revenues and expenses) (accounting elements seen as causes) Ordre 2 — Balance sheet accounts (assets and liabilities) (effect of transactions on the company's position) Managerial accounting Ordre 3 — Cost accounts and sales accounts (transactions classified as to purpose) Ordre 4 — Imputation or contra-accounts Budgetary accounting Ordre 5 — Budgeted operations Ordre 6 — Budgeted liquidities Ordre 7 and 8 were left open, in case other accounting systems were developed in the future. Ordre 9 was devoted to commit­ ments and transitory accounts, such as purchases and sales in cash, and internal transfers. In financial statements, transitory ac­ counts were to be replaced by the ordre to which they were related (1 or 2), and commitments were to be listed at the end of the balance sheet. Each ordre was further divided into categories, each having its own specific meaning. For example, the categories found in ordre 1 were charges and revenues that are included in the gross profit margin, operating charges and revenues, investment-related charges and revenues, administrative charges, miscellaneous rev­ enues and financial charges. These categories were further grouped to provide the following summary accounts: the gross profit margin, results of operations, net revenue from investments, net administrative charges and financial charges. The classifica­ tion adopted in that ordre was based first on the economic func­ tion of the transactions and second on their nature. Another ex­ ample of the breakdown of an ordre into categories is provided by ordre 2. In the latter, assets were divided, according to their eco­ nomic function in the company and their degree of liquidity, into fixed assets, investments, short-term assets (inventories and short­ term investments), receivables and liquid assets (cash and cash equivalents). Ordre 3 and 4 were devoted to cost accounting, constituting a 287

2014 ◽  
pp. 343-343
Keyword(s):  
Balance Sheet ◽  
Financial Statements ◽  
Profit Margin ◽  
Financial Accounting ◽  
Managerial Accounting ◽  
Accounting Systems ◽  
Fixed Assets ◽  
Net Revenue ◽  
Specific Meaning ◽  
Double Entry

scholarly journals Cash flow disaggregation and prediction of cash flow

2017 ◽  
Vol 18 (4) ◽  
pp. 464-479 ◽  
Author(s):  
Ehsan Khansalar ◽  
Mohammad Namazi
Keyword(s):  
Cash Flow ◽  
Balance Sheet ◽  
Cash Flows ◽  
Prediction Errors ◽  
Content Type ◽  
Balance Sheets ◽  
Income Statement ◽  
Aggregated Model ◽  
Flow Components ◽  
Future Cash Flows

Purpose The purpose of this paper is to investigate the incremental information content of estimates of cash flow components in predicting future cash flows. Design/methodology/approach The authors examine whether the models incorporating components of operating cash flow from income statements and balance sheets using the direct method are associated with smaller prediction errors than the models incorporating core and non-core cash flow. Findings Using data from US and UK firms and multiple regression analysis, the authors find that around 60 per cent of a current year’s cash flow will persist into the next period’s cash flows, and that income statement and balance sheet variables persist similarly. The explanatory power and predictive ability of disaggregated cash flow models are superior to that of an aggregated model, and further disaggregating previously applied core and non-core cash flows provides incremental information about income statement and balance sheet items that enhances prediction of future cash flows. Disaggregated models and their components produce lower out-of-sample prediction errors than an aggregated model. Research limitations/implications This study improves our appreciation of the behaviour of cash flow components and confirms the need for detailed cash flow information in accordance with the articulation of financial statements. Practical implications The findings are relevant to investors and analysts in predicting future cash flows and to regulators with respect to disclosure requirements and recommendations. Social implications The findings are also relevant to financial statement users interested in better predicting a firm’s future cash flows and thereby, its firm’s value. Originality/value This paper contributes to the existing literature by further disaggregating cash flow items into their underlying items from income statements and balance sheets.

scholarly journals IPTEKS NILAI WAKTU UANG DAN IMPLIKASI PENCATATAN AKUNTANSI

2019 ◽  
Vol 3 (2) ◽  
Author(s):  
Novi Swandari Budiarso
Keyword(s):  
Interest Rate ◽  
Balance Sheet ◽  
Financial Statements ◽  
Cash Flows ◽  
Time Value Of Money ◽  
Time Value ◽  
Financial Position ◽  
Income Statement ◽  
Statement Of Cash Flows ◽  
Value Of Money

Most of general public and firms know about money and its value but do not have better understanding how the money creates its own value relates to interest rate. Another side, most of firms still not realize that the time value of money has an impact on accounting recording and its reporting in financial statements, such as statement of financial position (balance sheet), income statement, and statement of cash flows.

Horse Vet, LLC: Transaction Analysis and Statement of Cash Flows Preparation (Option 1)

2017 ◽  
pp. 1-12
Author(s):  
Mark E. Haskins
Keyword(s):  
Financial Reporting ◽  
Balance Sheet ◽  
Financial Statements ◽  
Cash Flows ◽  
Financial Statement ◽  
Balance Sheets ◽  
Income Statement ◽  
Transaction Analysis ◽  
Business Events ◽  
Statement Of Cash Flows

This case pertains to the foundational underpinnings of the accounting process and the statement of cash flows. In Part I, students are presented with 23 business events that they must evaluate for recording in the financial records. Part II requires students to prepare a 2012 statement of cash flows using the information presented in the company's 2011 and 2012 year-end balance sheets along with its 2012 income statement. In Part III, students must rely on a 2011 balance sheet and a 2011 statement of cash flows to work backward to derive the 2010 year-end balance sheet. There are two versions of this case: Option 1 and Option 2. The Option 2 case is a bit more challenging than the Option 1 case. Instructors should use Option 2 if they feel students are well grounded in their understanding of financial statement relationships and the customary financial reporting of a typical set of business events. Both cases reinforce students' learning related to the accounting process and the connectivity between the financial statements. Please note that only one version of the case should be used due to the existence of some overlap between the two.

Dog Concierges, LLC: Transaction Analysis and Statement of Cash Flows Preparation

2017 ◽  
pp. 1-9
Author(s):  
Mark E. Haskins
Keyword(s):  
Balance Sheet ◽  
Financial Statements ◽  
Cash Flows ◽  
Balance Sheets ◽  
Income Statement ◽  
Transaction Analysis ◽  
Business Events ◽  
Statement Of Cash Flows

This case is appropriate in a MBA module for the accounting process and is also an excellent exam case. It provides a diagram of the three basic financial statements (balance sheet, income statement, and statement of cash flows) used to capture, codify, and communicate the effects of a series of typical business events. The case also gives students the opportunity to prepare a simple statement of cash flows using two sequential balance sheets and to work backward from a balance sheet and statement of cash flows to craft the beginning of the year's balance sheet.

Analyzing Two Investments—An Instructional Case to Introduce Basic Financial Accounting Concepts

2018 ◽  
Vol 33 (4) ◽  
pp. 47-56
Author(s):  
Wendy J. Bailey ◽  
Janet A. Samuels
Keyword(s):  
Financial Reporting ◽  
Business Students ◽  
Balance Sheet ◽  
Cash Flows ◽  
Legal Aspects ◽  
Financial Accounting ◽  
Net Income ◽  
Income Statement ◽  
Orientation Session ◽  
Statement Of Cash Flows

ABSTRACT This case introduces basic financial accounting concepts to graduate business students in an accounting orientation session (i.e., “boot camp”). Students assume they have invested in two cupcake businesses in Paris and they now want to determine which business performed best. Instructors can use this case, which provides students an opportunity to compare two businesses, to achieve several learning objectives including those related to accrual accounting (i.e., when to record transactions), the legal aspects of business (i.e., company structure, stock ownership, international accounting), and the use of estimates in financial reporting (i.e., depreciation, bad debts). This case also introduces students to the three basic financial statements (i.e., balance sheet, income statement, statement of cash flows), and the evaluation of financial results (i.e., net income versus cash flow, ratios). We have found that this simple, straightforward case helps students feel more confident when working with basic financial accounting concepts.

Effectiveness of Book Closing Using Web Based Accounting Online System 2.0 to Know the Company's Financial Ratios

2017 ◽  
Vol 1 (1) ◽  
pp. 56-60
Author(s):  
Euis Sitinur Aisyah ◽  
Maimunah Maimunah ◽  
Aris Martono
Keyword(s):  
Cash Flow ◽  
Balance Sheet ◽  
Financial Statements ◽  
Relevant Information ◽  
Financial Ratios ◽  
Web Based ◽  
Online System ◽  
Income Statement ◽  
Long Time ◽  
A Company

Financial ratios are very important in a company, because it is the most effective way to find out financial data on a company by comparing the current financial statements of the company with the previous one. To facilitate this comparison, book closure can be done. Closing the book itself is useful to determine the company's financial position before closing, by looking at the final results of the profit and loss. It is known that the process of closing the book takes a long time with extra precision. However, this has become easier by using WBAOS (Web Based Accounting Online System) 2.0, because companies are more flexible in preparing financial statements, starting from the lane balance sheet, income statement, to the periodic cash flow, where this cash flow provides relevant information regarding cash in and out of the company.   Keywords: ​WBAOS, Financial Ratios and Book Closure.

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