Lecture Notes Week 2 - THE UNIVERSITY OF NEW SOUTH WALES...

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THE UNIVERSITY OF NEW SOUTH WALES Australian School of Business School of Accounting ACCT 1501: Accounting and Financial Management 1A Weeks 2 – 6 The Mechanics of Accounting Student Handout Lecturer: Dr. Amna Khalifa School of Accounting UNSW QUAD 3104 Ph: 9385 6957 a.khalifa@unsw.edu.au Course website: http://www.webct.unsw.edu.au/
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WEEK 2: THE BALANCE SHEET AND TRANSACTION ANALYSIS 1. Introduction Every commercial entity engages in transactions with other parties. Woolworths buys products from suppliers, employs shop assistants, builds new stores, sells groceries and each individual transaction is recorded and reported in the Balance Sheet. This lecture examines the communication of financial information through the Balance Sheet. Learning objectives At the end of this topic, you should be able to: Begin to identify transactions Distinguish between external and internal transactions Analyse the effect of transactions on the accounting equation Identify the components of financial statements Understand the terms, format and function of the Balance Sheet Required Reading Trotman & Gibbons Chapter 1: pp. 9-17 Chapter 2: pp. 47-64 Chapter 3: pp. 99-109 Chapter 6: pp. 286-303 AASB Framework for the Preparation and Presentation of Financial Statements (downloadable from http://www.aasb.com.au )
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2. Tutorial Questions – Week 3 Preparation Questions ± T&G 2.13 ± T&G 2.18 ± T&G Case 2A Tutorial Questions ± T&G 2.7 ± T&G 2.26
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Accounting and Financial Management 1A Dr. Amna Khalifa Quad 3104 a.khalifa@unsw.edu.au Weeks 2-6, Session 1, 2009 The Mechanics of Accounting Week 2: The Balance Sheet and Transaction Analysis Week 3: The Income Statement and Transaction Analysis Week 4: Accounting Principles and the Accounting Cycle Week 5: Adjusting and Closing Entries Week 6: Completing the Accounting Cycle Accounting and Financial Management 1A Dr. Amna Khalifa Quad 3104 a.khalifa@unsw.edu.au Week 2, Session 1, 2006 The Balance Sheet
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Today’s lecture objectives: ± Understand the terms, format and function of the Balance Sheet ± Define assets, liabilities and owners’ equity ± Prepare a simple Balance Sheet Today’s lecture objectives: ± Understand that all transactions of an entity have an effect on the balance sheet equation ± To be able to analyse the impact of transactions on the balance sheet equation ± To appreciate the power and the simplicity of the balance sheet equation The Balance Sheet ² Historically, the most important financial statement ² Shows an organisation’s resources and claims on those resources at a particular point in time ² Reflects the accountability of managers to owners
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“balance” Balance Sheet Assets Liabilities Equities Resources Claims/Sources snapshot…”as at” “Snapshot” of resources company has available and where sourced Resources Claims/Sources ASSETS LIABILITIES EQUITY Balance Sheet Building the balance sheet Resources = Sources What we have What we owe What we contribute = +
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The balance sheet equation Resources = Sources Assets = Liabilities + Owners’ Equity
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Lecture Notes Week 2 - THE UNIVERSITY OF NEW SOUTH WALES...

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