Introduction ofFinancial Accounting

Chapter 1

Course objectives

Develop knowledge and understanding of underlying principles, concepts and regulations relating to financial accounting.

Use of double entry techniques Prepare financial statements

Course organisation1. Introduction of Accounting2. Statement of Financial Position3. The double entry recording process4. Middle exam5. Special Journals Cash Transactions6. Credit Sales and Credit Purchase Journals7. The General Journal8. The perpetual Inventory System9. Closing the General Ledger10. Statements of Financial Performance11. Statements of Cash Flow12. Depreciation of Non-Current Assets13. Profit Determination and Balance-Day Adjustments14. Final exam

Reference book

Keith King, VCE Accounting Units 3 and 4, MacMillan Publisher 2002

Kimmel, Weygandt, Kieso, Financial Accounting Fourth Edition

Assessment

1. Participation 10%

2. Quizzes 15%

3. The middle exam 25%

4. The final exam 50%

Objective 1

Use accounting vocabulary

is an information system that...

measures business activities,

processes information, and...

communicates financial information.

Accounting...

Information identificationInformation identification

Information recordingInformation recording

Information reportingInformation reporting

Information analysisInformation analysis

Accounting – information system

Identifying Business Activities

Recording Business Activities

Communicating Business Activities

Accounting Activities

is called the language of business.

Accounting...

External usersmake decisionsabout the entity.

Internal usersmake decisionsfor the entity.

Users of Accounting Information

Management Accounting

Financial Accounting

Fields of Accounting

• 1. Managerial accounting is concerned with providing information to managers

and other internal users

• 2. Financial accounting is concerned with measuring and communicating

information about business activities to external users (Financial statements)

13Financial Accounting - Chapter 1

Financial and Management Accounting

Financial accounting Management accounting

Report nature General purpose Special purpose

Level of detail Aggregated Dissected

Restrictions Standardised or regulated

Minimum restrictions

Reporting interval Less frequently More frequently

Time horizon Backward looking Forward looking

Range of information

Primarily monetary and objective

Often non-monetary with less objective constraints

Objective 2

Introduction to financial Statetment