...PRINCIPLES OF ACCOUNTING Higher 2 (2016) (Syllabus 9755) CONTENTS Page INTRODUCTION 2 AIMS 2 ASSESSMENT OBJECTIVES 2 SPECIFICATION GRID 2 SCHEME OF ASSESSMENT 3 SYLLABUS OUTLINE 3 SYLLABUS CONTENT 5 SUMMARY OF COMMONLY USED RATIOS 15 RESOURCES 16 Singapore Examinations and Assessment Board MOE & UCLES 2014 1 9755 H2 PRINCIPLES OF ACCOUNTING (2016) INTRODUCTION Principles of Accounting aims to provide candidates with a foundation course in accounting at a breadth and depth appropriate to the A Level. It is designed to provide candidates with a sound understanding of financial and managerial accounting procedures and an appreciation of its role in society. The teaching approach emphasises the broad educational aspects of the subject rather than one which is vocational or professional in nature. There is no requirement to learn the published accounting standards. Prior knowledge is not necessary for students offering this syllabus. It is not the intent of this syllabus to be a pre-requisite for any business-related courses. AIMS 1. Develop an understanding of the concepts, principles and practices of accounting and the ability to apply them in a variety of business and personal situations; 2. Develop an understanding of the role of accounting as an information system for monitoring, problemsolving and decision-making in changing economic, social and technological environments; 3. Develop a critical approach to analysing and evaluating accounting policies...
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...Rules vs. Principles Based Accounting Standards in the United States Elsie M. Powell Liberty University Online ACCT 301-D01 December 7, 2014 Rules vs. Principles Based Accounting Standards The United States of America is under a great decisional debate, should the United States adopt a more principles-based accounting standard or stay with the more rules-based standard that is currently used. The two standards offer differing views on how a company should approach their accounting needs. The United States continues its discussion about whether to change from the U.S. Generally Accepted Accounting Principles (U.S. GAAP) to the International Financial Reporting Standards (IFRS) and with the recent accounting scandals, the debate has become a heated topic. The key issues of the argument relates to a variety of moral issues and cost of transitioning from GAAP to IFRS. The question remains, should the United States replace the current rules-based accounting standards with a more relaxed principles based accounting standard. The Financial Accounting Standards Board (FASB) is a “designated organization in the private sector for establishing standards of financial accounting that govern the preparation of financial reports by nongovernmental entities. Those standards are officially recognized as authoritative by the Securities and Exchange Commission (SEC) (Financial Reporting Release No. 1, Section 101, and reaffirmed in its April 2003 Policy Statement) and the American Institute...
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...University of Phoenix – Marietta Campus DuDonna Jones Strategic Planning and Implementation 581 Facilitator Ben Olmos January 20, 2009 Accounting Principalsis a business unit of MPS Group, Inc (NYSE:MPS). MPS Group is a leading provider of staffing, consulting, and solutions in the disciplines of information technology, finance, accounting, law, engineering, and health care. MPS Group delivers its services to government entities and businesses in virtually all industries throughout the United States, Canada, the United Kingdom, and Europe. Headquartered in Jacksonville, Florida, MPS Group trades on the New York Stock Exchange. Accounting Principals external environmental factors include the legal system, workforce/labor market, economy, customers, competitors, technology, and society. Legally, Accounting Principals must follow the guidelines and ensure policies reflect the spirit as well as the letter of law. Accounting Principals mainly focus on placement of accounting and finance personnel. Every company has an accounting department that makes it easier for account managers to make a cold call into an organization. As the economy improves, firms expand which results in competing for qualified employees and staffing activities increases. When the economy is in a recession, the number of available candidates increases that results in less staffing activities. “The people who actually use...
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...Agency Theory: A brief Review by N. Waweru The agency theory assumes that there exists a contractual relationship between members of a firm. It recognises the existence of two groups of people; principals or superiors and agents or subordinates. The principals will delegate decision making authority to the agents and expect them to perform certain functions in return for a reward. Both the principals and the agents are assumed to be rational economic persons motivated solely by self-interest but may differ with respect to preferences, beliefs and information (Jensen and Meckling, 1976). The principal/agent relationship can exist throughout any organisation and usually starts from the shareholder-director and ends with the supervisor-shop floor worker (Figure 1.1). In an organisation context, which involves uncertainty and asymmetric information, the agent’s actions may not always be directed to the best interests of the principal. Agents’ pursuit of their self-interest instead of those of the principal is what is called the agency problem (Jensen and Meckling, 1976). To counter this behaviour, the principal may monitor the agents’ performance through an accounting information system. The owner can also limit such aberrant behaviour by incurring auditing, accounting and monitoring costs and by establishing, also at a cost, an appropriate incentive scheme (Jensen and Meckling, 1976). According to Jensen (1998), agency theory seeks to understand: (1) how to assign decision making...
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...International Accounting Standards Board (IASB) published a draft proposing changes in Revenue Recognition Standard on July 30, 2015, the Financial Accounting Standards Board (FASB) has also issued a similar proposed accounting standards update to clarify how to determine whether an entity involved in contract is a principal or an agent under the new revenue recognition standard. We found a news article written by Michael Cohn that discusses this recent FASB’s agenda in details. The proposed update will not change the principle part of new revenue recognition standard, but will clarify the implementation guidance on principal versus agent consideration. In the new revenue recognition standard, it points out when another party is involved in providing goods or service to customer, the entity is required to determine the nature of its promise. The determination will base upon whether the entity controls the good or the service before transferring to the customer. Specifically, if control of the goods or service belongs to the entity, the entity is a principal. On the contrary, the entity is an agent. There are some implementation issues, however, during this determination process. Those issues include how to identify the nature of the good or service, or how to apply control principle to certain types of transactions, and so on. In this case, the FASB has decided to propose an accounting standards update to address those issues related to the implementation guidance on principal versus...
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...Introduction Accounting theory is aiming to provide a coherent set of conceptual principles which form the general frame of reference for the explanation and development of facts of the accounting practices. There is no universally accepted single theory of accounting since there are so many different perspectives on the role of accounting theory. Also, a researcher’s own experience and value can effect which theory they support. This paper is mainly focus on the positive accounting theory and normative accounting theory. Positive accounting theory is introduced by accountants, which seeks to explain and make good predictions of real world phenomena then translate them to accounting practice, rather than prescribing such practice. For example, which particular accounting policies are likely to be adopted by a firm; or how a firm will react to the recently introduced accounting standards. This theory is based on the proposition that individuals (e.g. managers, shareholders and regulators) are rational and that they are motivated to maximize their own benefits, so they organize themselves efficiently. However, the limitation is people tend to lose the notions of morality and ethics. Positive accounting theory is also help to explain the relationships between individuals and the role accounting play in such relationships, like agency relationship. The agency relationship describes the relationship between the principals (e.g. shareholders) and agents (e.g. managers). Rely on the...
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...sufficient to assure that the Financial Accounting Standards Board will undertake its solution … There must be a suitably high likelihood that the Board can resolve the issues in a manner that will be acceptable to the constituency—without some prior sense of the likelihood that the Board members will be able to reach a consensus, it is generally not advisable to undertake a formal project”. Introduction: The above quotation has been taken from the book of Professor Miller which was published in 1986. Professor says that identifying a problem in the audit process is no guarantee that a solution will be found to the problem. The problem that is referred to in the above quotation is the problems that emerge during an audit that is performed in a business entity. What professor Miller tries to explain is that even if the issue is placed in front of the Financial Accounting Standards Board there is no surety that the Board will take action or responsibility in finding a solution to the problem. When a problem is presented to the Financial Accounting Standards Board there must be reason to believe that the Board members will be able to understand the problem collectively and create a solution to the problem by harmony, if however the chances are not there then an individual or an audit firm should not take up a project formally to try and find resolution though the Financial Accounting Standards Board. Financial Accounting Standards Board The main responsibilities...
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...Question CPA-02544 A principal auditor decides not to refer to the audit of another CPA who audited a subsidiary of the principal auditor's client. After making inquiries about the other CPA's professional reputation and independence, the principal auditor most likely would: a. Add an explanatory paragraph to the auditor's report indicating that the subsidiary's financial statements are not material to the consolidated financial statements. b. Document in the engagement letter that the principal auditor assumes no responsibility for the other CPA's work and Opinion. c. Obtain written permission from the other CPA to omit the reference in the principal auditor's report. d. Contact the other CPA and review the audit programs and audit documentation pertaining to the subsidiary. Explanation Choice "d" is correct. When the principal auditor decides not to make reference to the audit of the other auditor, in addition to satisfying himself or herself as to the other auditor's professional reputation and independence, he or she should visit the other auditor, discuss the audit procedures, and/or review the audit programs and audit documentation of the other auditor. Choice "a" is incorrect. The principal auditor may decide not to make reference to the other auditor e\€n when the portion of the financial statements audited by the other auditor is material. When the auditor takes this position, he or she should not state in his report that part of the audit was made by another...
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...paper is to formally address the Enron scandal that came out in late 2001. It will discuss a brief introduction to how Enron came to be such a large and powerful corporation and the decisions made which resulted in its ultimate downfall. While discussing these time periods, accounting issues such as the agency and horizon problems as well as agency costs and the manner in which they affected Enron will be dissected additionally. Lastly, an analysis of these issues and recommendations given in favor of preventing types of corruption like this will be listed out in detail. The company all starts with Kenneth Lay. Lay received a PhD in economics and was interested well ahead of the industry, in energy deregulation. He was promoted by George Bush Sr. to be named as Deregulations Ambassador at Large (Gibney, 2005). In 1990, Jeff Skilling joined Enron and turned the pipeline company essentially into an “energy bank”. This helped immensely for Enron in terms of establishing themselves as a very powerful corporation. “Enron was quickly transformed from a sleepy cash cow to a darling of Wall Street with a bounty of promising opportunities.” (Stewart, 2006). Enron’s misuse of mark to market accounting became step one of a few crucial mistakes that the company had made. “With a wave of accountants’ magic wands, Enron was authorized to record in a single year all the profit that would normally be booked over 10 to 20-year contract lives” (Stewart, 2006). This was just step...
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...[pic] ACCOUNTING 26:010:652 Advanced Topics in Management Accounting Fall 2009 Instructor: Dr. Michael Alles Office: 1WP 928 Office Hours: F 9:00-10:00 or by appointment Email: alles@business.rutgers.edu Phone: (973) 353 5352 COURSE OBJECTIVES In recent years my colleagues and I have noticed that when we are recruiting we come across newly minted PhD students who are usually highly technically proficient in terms of being able to run regressions, do statistical testing, solve analytic models or whatever, but they often fail to demonstrate that they have thoroughly thought about their papers—in other words, when you push them about the implicit and explicit assumptions and implications of their research models, it appears that they haven’t really given these matters much thought at all.[1] Too often they fall back on saying that they are doing what they are doing because that is the way it is done in the prior literature, which is more of an excuse than a answer. (Of course, once a researcher reaches a certain age, they all feel that youngsters aren’t as good as they were in the good old days!) Therefore, in this class we shall go beyond simply studying research in managerial accounting. For many of you, this is your first introduction to accounting research and to PhD level class. Hence, in these classes we shall also learn how to solve business problems systematically and to understand what it means to have thoroughly “thought through” a paper. We...
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...Polocies ACCOUNTING POLICIES & PROCEDURES FOR THE PHENIX CITY BOARD OF EDUCATION TABLE OF CONTENTS INTRODUCTION 4 ACCOUNTING REGULATIONS FOR SCHOOLS 5 ACCOUNTING POLICIES AND PROCEDURES FOR HANDLING SCHOOL FUNDS 7 LEGAL COMPLIANCE GUIDELINES 9 PUBLIC FUNDS 10 NON-PUBLIC FUNDS 11 PUBLIC AND NON-PUBLIC FUNDING 12 RECEIPTING MONEY 14 DEPOSIT POLICY 15 BANK ACCOUNT 15 ACCEPTANCE OF CHECKS 16 MASTER RECEIPT BOOK 16 TEACHER RECEIPT BOOKS 17 REFUNDS 19 CHILD NUTRITION PROGRAM DAILY DEPOSITS 19 RETURNED CHECKS 20 SCHOOL INCOME 21 STUDENT FEES 22 DONATIONS AND VOLUNTARY CONTRIBUTIONS 23 FUNDRAISERS 24 COMMISSIONS AND VENDING 26 CONCESSIONS 27 ADMISSION/TICKET SALES 29 TRANSFERS 31 BETWEEN ACTIVITIES 32 BETWEEN LOCAL SCHOOL AND ACCOUNTING OFFICE 32 JOURNAL ENTRIES 34 JOURNAL ENTRIES 35 PURCHASES 36 REQUISITIONS AND PURCHASE ORDERS 37 BID LAW 38 EXPENDITURES 39 CHECK PROCEDURES 40 CHECKS ISSUED TO ACCOUNTING OFFICE 40 INVOICES 41 PURCHASING CARD PROGRAM 42 GENERAL GUIDELINES AND PROCEDURES FOR CARD USAGE 43 RECORD KEEPING AND RECONCILIATION 46 MONTH END CLOSE 47 MONTH END CLOSE 48 YEAR END CLOSE 49 CALENDAR YEAR END 50 FISCAL YEAR END 50 FIXED ASSETS 51 OBJECTIVES OF THE FIXED ASSET POLICY 52 DEFINITIONS 52 PROCEDURES 53 PAYROLL 57 EMPLOYEE COMPENSATION 58 SALARY ADMINISTRATION 58 MINIMUM WAGE AND OVERTIME...
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...For those in the business world - particularly in the accounting field - a major issue has surfaced in recent years relating to the differences between Generally Accepted Accounting Principals (GAAP) and the International Financial Reporting Standards (IFRS). Currently, the majority of countries in the world follow International Financial Reporting Standards guidelines; however, the United States still uses Generally Accepted Accounting Principals. This topic has been a main focus because there is a plan for convergence between the two frameworks in the near future. The United States accounting system will undergo drastic changes when this occurs, but in the long-run the idea is to simplify the accounting procedures around the world. The main difference between GAAP and IFRS is that GAAP is considerably rule-based, whereas IFRS is more principal-based which means IFRS has room for interpretation. The specific differences are far too many to cover in a short presentation, however, an explanation of some major differences are mentioned below. In certain instances, GAAP and IFRS follow different approaches for the determination of specific amounts as well as how these amounts are recognized in financial statements and within the notes. One of these instances occurs in the measurement of inventory. Unlike GAAP which accepts the FIFO, LIFO, and weighted-average methods, IFRS does not accept LIFO. Also, when inventory is recorded on the balance sheet, IFRS requires that it be reported...
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...222, this semester I decide to take ACC 321. The name of the class is intermediate financial accounting. Before I took the class, I heard the class is the most difficult class among accounting class because of there is a lot of materials to cover in very short time. There are around 15 chapters to cover in a semester so that we have to learn a chapter in a week because we have to use some classes to take the exams and quizzes. And if I want to learn this course well and get a good grade as what I did in ACC221 and ACC222. I will have to read the book, listen to the teacher carefully, do the quiz well, prepare for the exam well and finish all the homework online. It is very important to study the ungraded homework as well because there are more questions to practice, more different kinds of problems to solve, different essay questions and more challenging question to practice. In chapter 1, we learned the differences between GAAP (General Accepted Accounting Principal) and IASB (International Accounting Standard Board). GAAP is the principal that America is using and IASB is the standard that Europe and some other countries are using. AICPA is America Institute of Certified Public Accountant. CPA is Certified Public Accountant. FASB is Financial Accounting Standard Board. SEC is the Securities and Exchange Commissions. In chapter 2, we learn the qualitative characteristics of accounting information like Relevance (Predictable, confirmable, materiality) and Faithful Representation...
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...The Importance of Islamic Accounting in Modern Era by: Chusnul Asfadillah Student of Airlangga University, Surabaya, Indonesia +62899 372 1772 Ines Nur Latifah Student of Airlangga University, Surabaya, Indonesia +62878 8432 3738 DR. Raditya Sukmana Lecturer of Airlangga University, Surabaya, Indonesia + 62 878 5421 6776 ABSTRACT Purpose – This paper aims to determine the importance of the Islamic Accounting in modern era. In particular, the paper analyzes the values of the Islamic principles in the accounting process that prevent the unexpected activity such as fraud, dishonest etc to appear in reality. Arthur Anderson case was a result of the fraudulent activities that lead to its termination. Certainly this kind of case is expecting not to be happened in the future. Design/methodology/approach – The paper adopts the descriptive analysis and elaboration of the important element of the Islamic principles used in the accounting process. Furthermore, this paper attempt to make clear distinction between values underlying the Islamic accounting and that of the conventional accounting. Findings – the comparison of those two systems leads to the conclusion that the value in Islam such as honest, fair, truth (which is important in the Islamic accounting process) has more meaning than the similar value of in the conventional accounting. Hold firmly the Islamic value obviously leads to the decrease fraudulent practices and other unexpected activities. Moreover, it increases the social...
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...return an interest-bearing note receivable from Easton Company. Pizzini Company will receive interest at the prevailing rate for note of this type. Both the principal and interest are due in one lump on March 31, 20X2. When should Pizzini Company report interest revenue from the note receivable? Discuss the rationale for your answer. A note receivable is a formal, written promise to receive a specific amount of cash from another party in the future. In this case, the party who receives payment under the terms of the note is Pizzini Company while the maker who is obligated to send funds to the payee is Easton Company. The amount of payment to be made, as determined in the terms of the note, is the principal amount. The principal is to be paid on the maturity date of the note, March 31, 20X2. Since Pizzini received an interest-bearing note, the company will also receive a stated rate of interest on the principal amount of the sold merchandise. The calculation of the interest earned on a note receivable is computed as: Principal * Interest rate * Time period = Interest earned. Generally, under the accrual basis of accounting, a business should record interest revenue even if it has not yet been paid in cash for the interest, as long as it has earned the interest. Contrarily, under the cash basis of accounting, interest revenue would only be recorded when a cash payment for interest is received by the entity. Companies will often record short-term notes at face value...
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