110 accounting lecture 1

8/6/2019 110 Accounting Lecture 1

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Lecture 1 Outline 27/02/200

BS110/2009/1/101

BS 110/5161: AccountingLecture 1

DECISION MAKING AND THE ROLE OF ACCOUNTING

Unit Description

We will focus on:

• the measurement and disclosure problemsconfronted by firms in accounting for theireconomic activities,

• the financial accounting concepts that help toresolve these reporting problems,

• the application of approved accounting standardsand other guidelines, and

• the decision usefulness of the accounting numbersthat are reported in the published financial

statements of Australian companies.2

At the completion of this unit, a studentwill understand

1. How business transactions are input, processed and output byaccounting information systems to produce financial statements,and how the usefulness of information produced by an accountinginformation system depends on its design.

2. How financial accounting meets the information needs of investors

and creditors, government regulators and taxing authorities.3. How businesses operate and how financial accounting serves

them.

4. Fundamental accounting concepts underlying the four primaryfinancial statements (ie. the Balance Sheet, Profit and Loss

Statement, The Statement of Changes in Equity and Statement ofCash Flows) and how those primary statements are inter-related.

5. Limitations of financial statements when making business orpersonal decisions.

3




BS110/2009/1/101

Attendance

In accordance with the School Regulations Chapter IV:

4.1.1 Students MUST attend no less than 80% of all

scheduled lectures, seminars, workshops and tutorials. Astudent who is absent from a unit without the approval of theCourse Coordinator or Unit Coordinator from its scheduled

, ,outlined in the unit outline may receive a Fail (F) grade for

the unit.

4.1.2 Arrival at any teaching period more than 10 minutes

after the commencement of the class may be deemed toconstitute absence.

4.1.3 Full time attendance at all scheduledpracticums/internships/fieldtrips, including necessary

briefing sessions, is compulsory

4

Student Honour Code

• Honesty

– be truthful in all my interactions with the University,

– not plagiarise

• Respect

– display courtesy to others and respect different views

– not engage in any behaviour that may be regarded as racist or

sexist

– not engage in any other form of discriminatory behaviour

– not interrupt or be disruptive in lectures, workshops and

tutorials

– not engage in any behaviour that represents bullying towards a

fellow student or staff member

– be punctual in attending all classes and meetings.

Student Honour Code

• Diligence

– attend all classes and tutorials

– fully prepare for classes as

advised by the instructor

– submit all assignments on time – participate in class discussions

and other teaching activities as

advised by my instructors

6




BS110/2009/1/101

Students should not expect

• to interrupt staff members when they are in conversation

with another student or staff member

• instantaneous replies to emails or email responses thatwould take considerable time to prepare

• to repeat outside of class information covered in class and

,illness)

• to be “spoon fed” with respect to their studies. They are

expected to display motivation and take responsibility for

their own education

• to receive a passing grade just because they turned up for

class and/or “did their best”.

7

Unit Program

WEEK WEEK

BEGINNING

LECTURE TOPIC TUTORIAL

1. 23 February 09 Decision making & Accounting

Text: Cha 1

No Tutorial

2. 2 March 09 Financial Statements &

Decisions

Text: Chap 2Chap 1: DQ 4 & 13; Ex

1.1; Ethical Issues (pg. 27)

3. 9 March 09 Recording Transactions (inc. Appendix)

Text: Chap 3Chap 2: DQ 7; Ex 2.3 &

2.11; Prob 2.8

Practice Quiz (Week 1)

8

ITE M #: T Y P E O F A S S E S S M E N T: W EI GHTI NG %: DUE DATE :

Item 1 Accounting Practice Set 30% 13 May 2009

Item 2 Online Quizzes 10% See below

Item 3 Tutorial Engagement 10% Ongoing

Item 4 Final Examination (see note below)

50% To be determined

9




BS110/2009/1/101

Blackboard

10

Text

Hoggett, Edwards, Medlin andTilling, Financial Accounting in Australia, 7th Edition,Wiley, Brisbane, 2008

Emerald Equestrian CentrePractice Set

11

Study Expectations

i. Read the Textbook

ii. Attend the Lecture

iii. Review Blackboard

iv. Attempt Tutorial Questions

The lecturer and tutor are here to support you in

your learning process, however the emphasis must

be on your own learning.12




BS110/2009/1/101

QUESTIONS?

13

THE CHANGING ENVIRONMENT OFACCOUNTING

• Rapid development of information and

communication technology

• Increasin demand for information of a non‐

14

financial nature by society

• Globalisation of business

• Adoption of international regulations including

accounting standards

What factors have impacted upon thedemand for accounting graduates?

15

Richard Dunks, Director

Robert Half Recruitment




BS110/2009/1/101

DECISIONS IN EVERYDAY LIFE

• Decisions involve choices because resources are

limited

• Each decision has outcomes that will affect future

16

decisions

Steps in decision-making

Choosecourse of action

3

4

17

Establish

goals

consequencesof alternatives

Gather availableinformation onalternatives

2

1

ECONOMIC DECISIONS

• Involve the use of economic resources

• Must

also

consider

18

– Personal taste

– Social factors

– Environmental factors

– Religious and/or moral factors

– Government policy




BS110/2009/1/101

THE NATURE OF ACCOUNTING

• Service activity – Business

19

– overnmen

– Charities

– Clubs

– Families

THE ACCOUNTING PROCESS

Identification CommunicationRecordingMeasurement

20

Transactions

Analysis and

interpretation

Recording,classification,summarisation

Quantificationin monetary

terms

Accountingreports

USERS OF ACCOUNTINGINFORMATION

• Internal users – How much profit is being earned?

– What products should be produced?

– What resources are available?

21

– What is the most efficient production process?

– What is the cost to reduce carbon emissions?

– What will be the effect of increasing or decreasing selling prices?

– How much profit is owing to outsiders?

– Will cash be available to pay debts as they fall due?

– What are benefits of owning vs leasing?




BS110/2009/1/101

USERS OF ACCOUNTINGINFORMATION continued

• External users

– Should I invest money in this business? – Will the business be able to repay money

22

– What are the business’s earning prospects?

– Is the business financially sound?

– Is the business providing products that are

socially and environmentally friendly?

23

USING INFORMATION IN ECONOMICDECISIONS

• Starting a small business

– Equipment purchases

– Repairs and maintenance

24

– nsurance

– Administrative costs

– Services to provide

– What to charge

– Potential customers




BS110/2009/1/101

USING INFORMATION IN ECONOMICDECISIONS continued

Darren’s Lawn-mowing

• Set up costsSecond-hand van $22 000Trailer 1 500

25

Rotary lawn mower 950Cylinder mower 1 600Chainsaw 1 150Edger 600Hedge trimmer 700Blower 1 000Shredder 1 400Brush-cutters 800Other too ls , l adders, b rooms (approx.) 850Total cost $32 550


• Operating costs

Fuels and oils, repairs and maintenance $220Part-time employee 150

$370

26

• Clients

Lawn-mowing and trimming (regular) 60Gardening, with shredding (regular) 12Tree-lopping and shredding (as requested) 20


• Charges

Lawn-mowing $33Gardening 66

Tree-lopping 99

27

• Estimated cash receipts

5 law ns m owed for eac h of 6 day s @ $33 ea $ 9 901 garden for each of 6 days for $66 each 396

$1386




BS110/2009/1/101 1

ACCOUNTING INFORMATION ANDDECISIONS

• How much information?

• Actual vs future events

28

• Outcomes and results of activity

Accounting information assistsowners and managers

to effectively and efficientlyrun their business

MANAGEMENT AND FINANCIALACCOUNTING

Management accounting Financial accounting

• Internal focus

– Planning

• External focus

• Re ortin information

29

– Controlling

– Decision-making

• Cost behaviour

• Budgeting

– Performance

– Position

• Financing and investing

• Compliance

ACCOUNTING AS A PROFESSION —AUSTRALIAN PERSPECTIVE

• Self ‐regulated by ICAA and CPA Australia

– Chartered Accountants (CA)

– Certified Practising Accountant (CPA)

30

• Three main areas of practice

– Public accounting

– Commercial accounting

– Not‐for‐profit accounting




BS110/2009/1/101

Public accounting

• Public accountants work in businesses which offer

services

to

the

public

for

a

fee

• Four main s ecialit areas

31

– Auditing and assurance services

– Taxation services

– Advisory services

– Insolvency and administration

Accountants in commerce and industry

• Accountants may be employed in business entities

• Responsibilities include

– General accounting

– Cost accountin

32

– Accounting information systems

– Budgeting

– Taxation accounting

– Internal auditing and audit committees

What will the next 5 years be like foraccounting graduates?

33

Richard Dunks, Director

Robert Half Recruitment




BS110/2009/1/101 1

Not-for-profit accounting

• Government accounting is concerned with the

efficient

use

of

resources

consistent

with

the

law

applying at federal, state and local levels

34

• Other not‐for‐profit organisations include

hospitals, churches, charities, clubs and private

educational institutions.

• These also have specialised accounting needs

ETHICS AND ACCOUNTING

• Ethics in business

• Ethics and professional accounting bodies

35

• Ethics in practice

– evasion and manipulation

– conflict of interest and insider information

– incompetence

– breach of confidence

36

110 accounting lecture 1

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