MSIN0004 AFB Term 1 Lecture 2 core deck.pptx - UCL SCHOOL OF MANAGEMENT MSIN0004 Accounting For Business Week 2 Lecture 2 Financial Frameworks 1 This

MSIN0004 AFB Term 1 Lecture 2 core deck.pptx - UCL SCHOOL...

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UCL SCHOOL OF MANAGEMENT MSIN0004 Accounting For Business Week 2: Lecture 2 Financial Frameworks 1 This Lecture draws upon Atrill & McLaney Chapter 2
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By the end of this Lecture you will…: Understand more about applying core principles when recording transactions and constructing financial statements Understand and be able to apply the idea of a systematic approach to recording transactions Understand and be able to apply a basic version of the DOUBLE ENTRY BOOKKEEPING and the principles of Duality in recording transactions. 2
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3 Lecture 1 Revisited and Developed Preparing Financial Statements We saw there are 3 core financial reporting statements: Income ( Profit ) Statement and Cash Flow Statement for a financial period – usually a year – and a Balance Sheet (Statement of Financial Position) at the end of the period. We met the ideas of the: Cash Flow Statement recording all physical cash inflows and outflows. Income Statement recording the financial value of operational (not capital) transactions, irrespective of the timing of the cash flows. The Balance Sheet as a photograph of the financial values of ASSETS and LIABILITIES & EQUITY 3
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First things first, let’s do a quick review of any issues you had with Genius Ltd and AFB Ltd… 4 Check Week 1 tab for Solution to Genius Ltd and AFB Ltd
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Building Financial Statements: key Issues to consider and remember… 5 Operational items (sometimes called Revenue transactions ) being included in the Profit calculation , Capital items being excluded from the Profit calculation and shown only as Capital transactions on the Balance Sheet.
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