Financial accounting:
Accounting answers to the need for decision making and make decisions. a tool that provides information
on the use of capital invested in a business as well as the results achieved with such application (it is an
information system).
Objectives:
provide info on
Financial position (equity and its value)
Changes in equity (controls and variations)
Profit or loss from operation (analysis of expenses, income,
and its result)
Info to stakeholders (investors, stakeholders, employees,
external banks, suppliers, customers, state, other creditors).
Conceptual framework
Purpose: Help ppl prepare financial statements in app of standards,
help form opinion on FS to standards and help users interpreting info contained in fs.
5 financial statements:
1. Balance sheet (statement of financial position)
2. Profit and loss account (statement of comprehensive income for the period)
3. Statement of changes in financial position (changes in equity for the period)
4. Statement of Cash Flows for the period
5. Notes, other statements and explanatory material
objective of financial statements is to provide information about the financial position, financial
performance, and cash flows of an entity that is useful to a wide range of users in making economic
decisions.
financial statements must "present fairly" the financial position, financial performance and cash flows of
an entity.
Lesson 3- The Accounts- we will have a code of accounts for the exams.
Balance sheet
shows the accumulated wealth at a particular point in time.
Related to obligations to pay, which correspond to the remuneration of productive factors, and to
the rights to receive, which correspond to the remuneration of sales and services rendered.
▪ Asset –a resource controlled by the entity because of past events and from which
future economic benefits are expected to flow to the entity.
NCA- held long term. Fixed life more than a year.
Tangible- (buildings, machinery, equipment)
Intangible- (patents, trademarks)
CA- held short term. Turn into cash in less than a year. (inventory, bank account)
▪ Liability- a present obligation of the entity arising from past events, the settlement
of which is expected to result in an outflow from the entity of resources embodying economic benefits.
NCL- Long term debts (loans) only non-current if they tell it to us, cannot assume how long will be paid.
CL- (debts of business that must be paid within 1 year)
▪ Equity -residual interest in the assets of the entity after deducting all its liabilities.
Accounting answers to the need for decision making and make decisions. a tool that provides information
on the use of capital invested in a business as well as the results achieved with such application (it is an
information system).
Objectives:
provide info on
Financial position (equity and its value)
Changes in equity (controls and variations)
Profit or loss from operation (analysis of expenses, income,
and its result)
Info to stakeholders (investors, stakeholders, employees,
external banks, suppliers, customers, state, other creditors).
Conceptual framework
Purpose: Help ppl prepare financial statements in app of standards,
help form opinion on FS to standards and help users interpreting info contained in fs.
5 financial statements:
1. Balance sheet (statement of financial position)
2. Profit and loss account (statement of comprehensive income for the period)
3. Statement of changes in financial position (changes in equity for the period)
4. Statement of Cash Flows for the period
5. Notes, other statements and explanatory material
objective of financial statements is to provide information about the financial position, financial
performance, and cash flows of an entity that is useful to a wide range of users in making economic
decisions.
financial statements must "present fairly" the financial position, financial performance and cash flows of
an entity.
Lesson 3- The Accounts- we will have a code of accounts for the exams.
Balance sheet
shows the accumulated wealth at a particular point in time.
Related to obligations to pay, which correspond to the remuneration of productive factors, and to
the rights to receive, which correspond to the remuneration of sales and services rendered.
▪ Asset –a resource controlled by the entity because of past events and from which
future economic benefits are expected to flow to the entity.
NCA- held long term. Fixed life more than a year.
Tangible- (buildings, machinery, equipment)
Intangible- (patents, trademarks)
CA- held short term. Turn into cash in less than a year. (inventory, bank account)
▪ Liability- a present obligation of the entity arising from past events, the settlement
of which is expected to result in an outflow from the entity of resources embodying economic benefits.
NCL- Long term debts (loans) only non-current if they tell it to us, cannot assume how long will be paid.
CL- (debts of business that must be paid within 1 year)
▪ Equity -residual interest in the assets of the entity after deducting all its liabilities.
