04-06-17ACFI_1010 - Week 1 Management Accounting Internal...

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Week 1 Management Accounting – Internal Financial Accounting – External Business organisation: Proprietorships Partnerships Companies (aka Sole trader) Simple to establish Owner Controlled Unlimited Liability Capital Not as readily Available. Simple to establish Control equally shared Capital more easily obtained. Unlimited Liability. Ownership easily transferable on stock market Capital readily available No personal liability. Register with ASIC Financial Reporting Environment: Corporations act prescribes the preparation of financial reports. Other regulatory bodies that regulate the preparation of general-purpose financial reports are: 1. Australian Securities and Investment Commission (ASIC): - Enforces Corporations Act, requiring the preparation of financial reports. - Monitors compliance of financial reports, according to accounting standards. - Investigates suspect companies. Auditors also report findings to ASIC. 2. Financial Reporting Council and Australian Accounting Standards Board (FRC and AASB): - The FRC consists of members of the business community and government agencies, overseeing and allocating funding to the AASB. - FRC also monitors the international progress in standard setting of accounting, and keeps the government abreast of this. - AASB issues accounting standards. Also develops a conceptual framework to be followed when preparing financial statements, guidance, not mandatory. 3. Australian Accounting Research Foundation (AARF): - Jointly sponsored by CPA Aust and Aus Institute of Chartered Accountants (ICAA).
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- Auditing Standards board contained within. Issues standards followed by auditors. 4. ASX: - Listed entires must comply with rules typically relating to disclosure. - Industry specific requirements, eg mining must disclose details of mineral reserves. Types of Business Activity: Financing: - Bank Loan. - Debentures or unsecured notes – borrowing directly from the public. Debentures are secured against an asset in the company. - Share Capital – shares of the company sold to investor. Claims of creditors come before those of shareholders/owners in the case of administration. However, to offset this risk, they are paid a dividend. Investing: - Purchasing property, plant and equipment (fixed assets). - High in the early stages of company. Many assets are aquired through investing activites, however some are aquired during operation. Eg accounts receivable. Operating Activities: - Using assets to operate, creativing operating (sales or service) revenue - Interest revenue can be created with short term deposits. - Expenses are the costs or assets consumed or services used during operation. - Expenses classified possibly into COGS, Selling expenses, administrative, marketing, and interest. The relationship between revenue and expenses determines a net profit or net loss.
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This note was uploaded on 04/15/2010 for the course ECON 001 taught by Professor Aho during the Spring '10 term at 카이스트, 한국과학기술원.

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04-06-17ACFI_1010 - Week 1 Management Accounting Internal...

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