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MBA Accounting Notes

MBA Accounting Notes



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Published by husnaink
Husnain Khalid,s notes on MBA Financial accounting
Husnain Khalid,s notes on MBA Financial accounting

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Published by: husnaink on Nov 19, 2009
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UNTIT 1:1.1Evolution of accounting1.2Accounting Concepts and Principles:
The Entity Concept 
-An organization is a separate entity from the owner(s) of the organization.
The Reliability (Objectivity) Principle
-Accounting records and statements should be based on themost reliable data available so that they will be as accurateand useful as possible.
The Cost Principle
- Acquired assets and services should be recorded at their actual cost not at what they are believed to be worth. 
The Going-Concern Concept 
-The assumption that the business will continue operatingfor the foreseeable future.
The Stable-Monetary Unit Concept 
-Accounting transaction are recorded in the monetary unitused in the country where the business is located.
1.3Why study Accounting
The primary purpose of accounting is to provide information that is useful for decision making purposes. From the very short, we emphasize that accounting is not anend, but rather it id the mean of end.The final product of accounting information is the decision that is ultimatelyenhanced by the use of accounting information weather that decision are made by owner,management, creditor, government regulatory bodies, labor unions, or the many other groups that have an interest in the financial performance of an enterprise. 
1.4Accounting Information SystemInformation user
1.Investors.2.Creditors.3.Managers.4.Owners.5.Customers6.Employers.7. Regulatory. SEC, IRS, EPA.
Cost and Revenue Determination
1.Job costing.2.Process costing.3.Activity based costing.4.Sales.
Assets and liabilities
1.Plant and equipment.2.Loan and equity.3.Receivable, payable and cash.
Cash flows
1.From operation.2.From finance.3.From investing. 
Decision supporting
1.Cost /volume/ profit analysis.2.Performance evaluation.3.Incremental analysis.4.Budgeting.5.Capital allocation.6.Earnings per share.7.Ratio analysis 
1.5Manual and computerized based accounting1.6
Basic Accounting Model1.Recording
(All transaction should be recorded in journal).
(After recoding entries should be transfer to ledger).
( Last stages is to prepare the trial balance and final account with aview to ascertaining the profit or loss made during a trading period and thefinancial position of the business on a particular data).
TransactionBalance sheet JournalFinal account LedgerTrial balance1.7Financial statements
Financial statements are declarations of information in financial terms about an enterprisethat are believed to be fair and accurate. They describe certain attributes of the enterprisethat are important for decision makers, particularly investors (owners) and creditors.
We discus three primary financial statements1.
Statement of financial position or balance sheet.
Income statement.
Statement of cash flow. Statement of owners equity.
 Income Statement 
- a summary of a company’s revenues and expenses for a specific period of timeRevenue - Amounts earned by delivering goods or services to customers.Expense - The using up of assets or the accrual of liabilities in the course of deliveringgoods or services to thecustomers.Income Statement Format:Revenues $xx,xxx- Expenses xx,xxx= Net Income $ x,xxx

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