Accounting 1B ACCT1511 - Accounting 1B ACCT1511 Questions...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Accounting 1B ACCT1511 Questions: What would be your price target and recommendation for AAPL? Show your calculations and round to nearest cent. (They compared AAPL to all shares, do I just compare it to one) Can I write Permanent and Timing instead of what they have written for indirect method of calculating Net Cash from operating expenses? Accounting Principles and The Use of Accounting Information Accounting concepts and principles form the logical structure that is used by accountants and auditors to check. The application of accounting standards and principles depends on the accounting entity (The enterprise which accounting is being done for). Generally Accepted Accounting Principles (GAAP) refers to the rules and standards that companies are expected to follow when preparing financial statements set by authorities and standard-setters. GAAP was formed following the Stock market crash of 1929 following the criticism that poor financial disclosure resulted in unsound financial decisions. In Australia GAAP is formed by: 1. Accounting standards: formed based on the International Accounting Standards Board accounting standards, which created an international accounting standard. It is modified with accounting standards made by the Australian Accounting Standards Board so it is tailored to Australia’s financial environment. 2. Conceptual framework: outlines the general concepts and principles to be used in preparing and presenting financial statements as outlined by the Statement of Accounting Concepts. Originally there were 4 SACs but now there are only the 1 st and 2 nd SAC as the 3 rd and 4 th were covered by the AASB Framework For The Preparation and Presentation of Financial Statements The Framework established by the AASB establishes the concepts of the preparation of general purpose financial statements and reports for external users and covers: - The objective of financial reports - Accounting Assumption in financial reports - Characteristics that determine the usefulness of financial reports - The definitions of the elements in a financial report and how they are measured and recognized The main users of financial reports suggested by the Framework include: 1. Investors: risk in investments 2. Employees: stability and profitability in enterprise 3. Lenders: Security of loan 4. Suppliers and other trade creditors: whether the amount owed will be paid and when 5. Customers: the continuance of the enterprise 6. Governments: regulation and taxation of enterprise activities
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
7. Public: Multiple uses The Objective of Financial Reports The objective of financial reports is to provide information about financial position, performance and cash flows to allow users to make sound economic decisions. Sound economic decision for most users will require an evaluation of the future cash flow of the entity which can be shown by financial reports.
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern