...sdsdsdsdsaaaaaaaaaaaaaTen principles of finance are listed and explained in this ahort lecture. Principle 1. The risk-return trade-off Principle 2. The time value of money Principle 3. Cash—Not Profits—is King Principle 4. Incremental cash flows Principle 5. The curse of competitive markets Principle 6. Efficient Markets Principle 7. The Agency Problem Principle 8. Taxes bias business decisions Principle 9. All risk is not equal Principle 10. Ethical dilemmas persistTen principles of finance are listed and explained in this ahort lecture. Principle 1. The risk-return trade-off Principle 2. The time value of money Principle 3. Cash—Not Profits—is King Principle 4. Incremental cash flows Principle 5. The curse of competitive markets Principle 6. Efficient Markets Principle 7. The Agency Problem Principle 8. Taxes bias business decisions Principle 9. All risk is not equal Principle 10. Ethical dilemmas persistTen principles of finance are listed and explained in this ahort lecture. Principle 1. The risk-return trade-off Principle 2. The time value of money Principle 3. Cash—Not Profits—is King Principle 4. Incremental cash flows Principle 5. The curse of competitive markets Principle 6. Efficient Markets Principle 7. The Agency Problem Principle 8. Taxes bias business decisions Principle 9. All risk is not equal Principle 10. Ethical dilemmas persistTen principles of finance are listed and explained in this ahort lecture. Principle 1. The risk-return trade-off ...
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...CHAPTER 2 Generally Accepted Accounting Principles Introduction Need of Accounting Principles Generally Accepted Accounting Principles Characteristics of Accounting Principles Objectivity Application Reliability Feasibility Understandability Accounting Concepts Separate Entity Concept Money Measurement Concept Dual Aspect Concept Going Concern Concept Cost Concept Period Accounting Period Concept Periodic Matching of Costs and Revenues Concept Realisation Concept Accounting Conventions Conservatism Consistency Materiality Full Disclosure Your Check Your Understanding Descriptive Questions Interview Questions Accounting for Managers 24 2.1 INTRODUCTION Accounting is the language of business. When we speak in any language, our intention is our ideas are to be understood by others. Language can be understood only when words used by us convey the same meaning to the listener. Both the speaker and listener should mean the same for the words used. Equally, every language has grammar of its own. When we write or speak, we follow the principles of grammar. Similar is the case with accounting. Most of the activities, be it official, social or personal, are guided by a set of certain rules or conventions. Some of the conventions are as follows: ♦ In India, we always drive on the left hand side of the road. ♦ Overtaking the vehicle, either two-wheeler or four-wheeler, is to be made on the right side, alone. ♦ As a citizen of India...
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...local, state or federal government. The not-for-profit entities are also under close scrutiny and observation and the general public wants to know how a not-for-profit organization manages its resources, mainly because the public needs to know if a donation to such an entity would be used to accomplish the written goals and missions of such entities or organizations. When it comes to governmental organizations, the tax payers need to know what is being done with the money that they are paying in taxes, and if the governments are using the resources wisely. Media is also putting a lot of pressure on governments and not-for-profit entities, demanding transparency and accountability for the resources used. The principle of accountability requires that the local, state and federal governments report and answer to the citizens, and by doing this the governments need to justify the raising of public resources and the purposes for which the resources raised are used. There are three different governing boards that establish accounting principles, standards and rules on how to recognize and report accounting related transactions. There is the FASAB, which stands for Federal Accounting Standards Advisory Board. This is the board that establishes accounting principles and standards for reporting for the federal government. When it comes to local and state governments, the authority or the board that dictates the accounting related principles and rules is GASB. GASB stands for Governmental...
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...Ethics Steven J. Ramsey University of Minnesota Introduction In this paper, I will be applying ethics – principles of right and wrong – from an administrative perspective to three specific situations. In the first situation I describe the application of two ethical principles in relation to access to healthcare at a hospital. The next situation deals with the moral issues raised by mandating the use of ultrasound technology. Here I explain which ethical principles are used to justify this practice, and which ones are violated by this practice. In the last situation, I describe an ethical dilemma I was personally faced with and the ethical principles I used to resolve it. 1. Access to HealthCare The Principle of Utilitarianism Utilitarianism is the moral theory that says the rightness of an action is determined by its contribution to the greatest good for the greatest number. This theory argues against specific actions that would benefit an individual in favor of actions that serve to benefit society overall. Using this theory as a principle for making healthcare decisions, the objective becomes to maximize the health of the population served, which is in conflict with the widely held objective to maximize the care to every individual patient. For example, when having to choose between offering a program that benefits one thousand patients every year verses a program that benefits only five patients...
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...superior to the small business owner. Disadvantages Since the direct write-off method records the loss only when the account is determined uncollectible, it may result in a loss from a prior period being charged against unrelated income in a future period. This may result in the distortion of a company's true profit of a given period, and does not comply with GAAP matching principle, which requires expenses to be matched with their associated revenues within the same period.Advantages The direct write-off method is simple, and can be used by individuals that maintain a company's set of books yet have no extensive accounting education. Unlike the allowance method that estimates probable losses using various ratios and factors, the direct method is based on an actual amount which may be more superior to the small business owner. Disadvantages Since the direct write-off method records the loss only when the account is determined uncollectible, it may result in a loss from a prior period being charged against unrelated income in a future period. This may result in the distortion of a company's true profit of a given period, and does not comply with GAAP matching principle, which requires expenses to be matched with their associated revenues within the same period.Advantages The direct write-off method is simple, and can be used by individuals that maintain a company's set of books yet have no extensive accounting education. Unlike the allowance method that estimates probable...
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...Expenses $ 10,500,000 Net Income $1,500,0000 2. What were Brandywine’s 2007 net income, total profit margin, and cash flow? Brandywine’s net income for 2007 was $1,500,000. Net Income = Total revenue - Expenses Net Income = $12,000,000 - $1,500,000 = $1,500,000 Total profit margin is net income divided by total revenues and measures expense control for a given amount of revenues. Total profit margin = Net income / Total revenues Total Profit Margin = 1,5000,000 /12,000,000 = .125 = 12.50 % Cash flow is the actual amount of cash that is generated during the year. Cash flow= Net Income + Depreciation Cash Flow = 1,500,000 + 1,500,000 = $3,000,000 3. Suppose the company changed its depreciation calculation procedures (still within GAAP) such that its depreciation expense doubled. How would this change affect Brandywine’s new income, total profit, and cash flow? With depreciation doubled it would be $3,000,000. Calculations on how net income, total profit and cash flow will be affected are below. Net Income = $12,000,000 (revenue) - $12,000,000 ( expenses w/ depreciation) = $0 Net income is $0 for Brandywine’s Homecare which shows they made no profit. Even though they are a not-for-profit business, they still need to make a profit so that it can be reinvested in the business. Total Profit = $0 (net income) / $12,000,000 = 0% With...
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...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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...Profit Maximization It is almost every company’s goal to maximize their profits in order to gain the best return they can on their investments. Maximizing profits helps to facilitate the longevity and survivability of a company because it provides the company the ability to expand their business, borrow money, attract investors, and hire more employees. Understanding when or if the company is profitable can be somewhat overwhelming at first, but by applying the principals of total revenue, total cost, marginal revenue, and marginal costs the process of determining profitability is simplified greatly. In order to understand how the principles of economics affect the profitability of a company it is important to understand what each principal is. The first principle, total revenue can be summarized as, the price of a unit sold multiplied by the number of units sold. For example if the price per unit sold is $10 and the firm sells 10 units, the total revenue is $100. The next principle, total cost, is defined by McConnell, Brue, and Flynn (2012) as, “the sum of fixed costs and variable costs” (p. 35). Fixed costs are items that do not change when output is changed and can include items such as real estate, utilities, loan payments, and government fees. Variable costs on the other hand are the opposite of fixed cost and include the costs associated with an increase in output (McConnell, Brue, Flynn, 2012, p. 148). Examples of variable costs could include items such as materials...
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...“Islamic Accounting : Their Position in International Standard Harmonization” Rendy Anggita Putra “Islamic Accounting : Their Position in International Standard Harmonization” 1. Abstract According to (Susela, 1999) said the development of accounting theories is are affected by several factors including political and economic interests of certain people or group in community. Therefore, it can be also called if the accounting is a significant tool to illustrate the interests and perspectives of the various stakeholders. Islamic industry of finance has obtained tremendous growth in last few years, both in number of assets that manage by industry and in the diversity of financial products. A global system that can rule the industry will become significantly important for the Islamic finance sector in order to meet the needs of continued growth (Vinnicombe, 2012). Harmonization of Shari’a accounting standards has continue to be made by the AAOIFI as it is also done by the International Accounting Standards Board (IASB) for conventional accounting harmonization. In its development, financial reporting in Islamic accounting adds some different additional reports than conventional accounting to accommodate the unique transactions of Islamic economics. In that regard, this paper have objective to explore the main important values of Shari’a accounting and reporting standards of Islamic Accounting and try to find the answers of Islamic accounting positions among the process...
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...for Not-For-Profit organisations. I am attempting to bring together a couple of principles which will explain our approach to the Pro Bono Campaign. PRINCIPLE ONE: BRAND IDEALS Ogilvy are proponents of the idea of Brand Ideals. Millward Brown, also part of WPP, have initiated a measurement tool for Brand Ideals which is said to the “the engine of business growth.” A Brand Ideal is defined as “a higher purpose of a brand or an organisation which goes beyond the product or service that they sell. The ideal is the brand’s inspirational reason for being. It explains why the brand exists and the impact it seeks to make in the world. A brand ideal actively aims to improve the quality of people’s lives.” Here is how the concept of brand ideals is applied in the For Profits sector: * Dove believes that the world would be better if women were allowed to feel good about themselves. * Fanta believes that the world would be a better place if we grew up less and played more. * Scrabble believes that the world would be a better place if we loved words more. * Adidas believes that the world would be better place if people went beyond their normal boundaries. * Coca-Cola believes that the world would be a better place if we saw the glass as half full – not half empty. PRINCIPLE TWO: APPLICATION OF BRANDING IN NON-PROFITS Several Universities, including Stanford and Harvard, have investigated the role, or application of, branding in the Not-For-Profit (NFP) sector...
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...BASIC RETAIL PRINCIPLES Category Management The principles outlined in the category management section are based on many years experience in retailing and proven fundamentals. They are presented in a format to encourage you the retailer to work on these principles within your business. By the very nature of retailing, markets and customers will change over time. Retailers must understand and mange this information through category management. Due to the limited amount of time available in the review, the principles will be limited in there scope to generic retail principles. Managing your retail business through category management improves your knowledge and ability to react quicker to the customer’s wants and needs. As a retail owner you need to have at least 15 categories based on product groupings within your store. You can also break down each category into sub categories for further analysis. The categories that you establish will be the basis of ongoing management across key performance indicators (KPI’s) that you want to manage within your business. The categories you chose should be based on product types or groupings. If you are in food for example your categories would be your menu offer for example: sandwiches, cold drinks, coffee, cakes, salads, donuts. If you are in home wares categories like: gadgets, dinnerware, saucepans, kitchen ware, and glass ware are some examples. How good is your collection of data? To collect information on categories you need to...
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...the terms of a settlement of a dispute agreed to before the date of issue of the Determination (see paragraphs 21 and 22 of Taxation Ruling TR 92/20). Taxation Determination Income tax: what is the significance of the Archer Brothers principle in the context of liquidation distributions? 1. In a joint judgment, the Full High Court of Australia in Archer Bros Pty Ltd (In Vol Liq) v. FCT (1952-53) 90 CLR 140 at 155; 10 ATD 192 at 201 observed by way of obiter dicta: 'By a proper system of bookkeeping the liquidator, in the same way as the accountant of a private company which is a going concern, could so keep his accounts that...distributions could be made wholly and exclusively out of...particular profits...or income...' 2. These observations have given rise to what is known as the Archer Brothers principle. The principle is that if a liquidator appropriates (or 'sources') a particular fund of profit or income in making a distribution (or part of a distribution), that appropriation ordinarily determines the character of the distributed amount for the purposes of section 47 and other provisions of the Income Tax Assessment Act 1936 (the Act). Generally, we accept that a liquidator may rely on the Archer Brothers principle, except where a specific provision...
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...Accounting Chapter: 1 Introduction to Accounting ▪ Bookkeeping is the detailed recording of all the financial transactions of a business. Accounting uses these bookkeeping records to prepare financial statements. ▪ It is necessary to prepare financial statements to show the profit or loss of the business and the financial position of the business and it will help in decision-making. ▪ The accounting equation shows that the assets are always equal to the capital plus the liabilities of the business. Assets = Capital + Liabilities ▪ A balance sheet is a statement of the financial position of a business and a certain date. Chapter: 2 Double Entry Bookkeeping- Part A ▪ Every transaction must be entered twice-on the debit side of one accounting and on the credit side of another account. ▪ The debit entry is made in the account which is receiving the value and the credit entry is made in the account which is giving the value. ▪ Each type of asset, liability, expense and income has its own ledger account. ▪ Any value taken from the business by the owner of the business is known as drawings. ▪ At the end of the period, the accounts of assets and liabilities which contain more than one entry should be balanced. ▪ The entries for purchases and sales and purchases returns and sales returns are...
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...participate directly or indirectly to the management, control or the capital of both enterprises. They can be defined simply as transactions prices between companies of the same group and resident in different states. This type of transactions involves intra-group transactions crossing borders. Example: Within a MNE group, a subsidiary A established in France sells computers to another subsidiary B established in Britain, the selling price of computers is a price transfer. The goal of the transfer pricing rules is to accurately measure income between related parties by determining the “arm’s length” price that the selling company would charge an unrelated party. 2. Arm’s length principle According to the Article 9 of the OECD Model Tax Convention, the arm’s length principle...
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...their products. A large retailer opened for business in the hometown which caused the labor rates in the area to rise also contributing to Guillermo’s increasing production issues. The labor wages in complement with the overseas caused the owner to look into alternative methods for his business. The Principal of Self-Interested Behavior This principle came into effect with the owner realizing that his business was taking a financial hit when the other competitors came into play. He realized that the business was going to be economically challenged with the additional players and in his self-interest he realized the need for change. This basic principle was realized and the owner placed an emphasis on self-preservation in his business venture. The Principle of Two Sided Transactions The principal of two sided transactions is straight forward. For every buyer there is a seller and for every seller there is a buyer. The concept has a direct relation to the principle of self-interest. Guillermo in his research realized that maybe following a distribution standpoint instead of a manufacturing standpoint could assist him in meeting profit margins...
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