Bussiness Accounting

Maggie May Hosking
Mind Map by Maggie May Hosking, updated more than 1 year ago
Maggie May Hosking
Created by Maggie May Hosking over 5 years ago
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Mind Map on Bussiness Accounting, created by Maggie May Hosking on 11/02/2014.
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Bussiness Accounting
1 Glossary Of terms used
1.1 Company- Busniess organisation owned by shareholders
1.2 Financial period- Period of time usually 12 months in which financial reporting is done
1.3 Financial Statements- reports prepared from accn Records
1.4 ShareHolders- Collective name for owners of company
1.5 Transaction- Any business deal of a financial nature
1.6 Members- Collective name of owners of a CC
1.7 Depreciation- the amount charged each year for the usage of depreciable fixed assets. As the allocation of the cost of the asset over its useful life
2 Forms of companies
2.1 Sole Trader, no legal personality, limited life span no limited liability, owners manage, personal tax
2.2 Partnership- no legal personality, limited life span, 2-20 partners, jointly and severally liable for debts, partners manage, personal tax
2.3 Close Corportion- jurustic personality, seperate legal entity, unlimited life, 1-10 members, members have limited liability, members manage, company tax and tax on distributions
2.4 Companies- Juristic personality, seperate legal entity, 1-50 shareholders if private, if public min of 7 no max, BOD manage, Companies pay tax and tax on distributions
3 Users of Accn Informations
3.1 Primary Users- Ownership interest, providers of capital, investors
3.2 Secondary Users- Financial Interest, No ownership, Managements & employees
3.3 Tertiary Users- No Ownership, No Financial interest, Financial analysts, SARS, Government
4 Underlying Assumptions
4.1 Accrual Basis
4.2 Going Concern
4.3 Entity Convention
5 The Qualitative Characteristics of Financial statements
5.1 Understandability
5.2 Reliability
5.3 Relavance & Reliability
5.3.1 Timeliness
5.3.2 Cost/Benefit
5.4 Comparability
5.5 Materilality
6 Asset- Controlled by business, Past event, Future benefit
6.1 Current
6.1.1 Realised within 12 months
6.1.2 Inventories
6.2 Non Current
6.2.1 Tangable
6.2.1.1 Property,Plant,Equipment
6.2.2 Intangable
6.2.2.1 BrandNames, Licenses, CopyRights
7 Liabitltiy- Obligation, past event, outflow of resouces
7.1 Current
7.1.1 Short Term (Within 12 Months)
7.2 NonCurrent
7.2.1 Long Term(Longer than normal operating cycle)
8 A=OE+L
8.1 Assets
8.2 Owners Equity
8.2.1 Capital
8.2.2 Income
8.2.3 -Expenses
8.2.4 -Dividends
8.2.5 If OE is (-) business is insolvent
8.3 Liabilities
9 Depreciation------strightline method (Cost/UL)
10 +A- -L+ +D- -I+ -C+ +E-
11 No Gross Profit/Cost of sales for services rendered
11.1 Selling Price = Original Cost + Mark up
11.2 Gross Profit= Sales- COS
11.3 COMPUTATIONAL COST OF SALES
11.3.1 Value of inventory @ Beginning of Period
11.3.1.1 + Purchases
11.3.1.1.1 = Cost of goods available for sale
11.3.1.1.1.1 -Value of Inventory @ End of period
11.3.1.1.1.1.1 =Cost of sales
12 Bad Debts
12.1 DR BAD DEBTS
12.2 CR ACC RECEIVABLE
13 SOFP
13.1 Assets
13.1.1 Non Current
13.1.1.1 Current
13.1.2 Total Assets
13.1.2.1 Equity (CDIE)
13.1.2.1.1 Liabilities
13.1.2.1.1.1 Current
13.1.2.1.1.2 Non Current
14 Ratios
14.1 Profitability
14.2 Efficiency
14.3 Gearing
14.4 Investment
15 FIFO =First in first out
15.1 Average Cost
16 Periodic
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