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25 Cards in this Set

  • Front
  • Back

INCOME

Increase in economic benefits of the entity in form of inflows, enhancements of assets, decreases of Liabilities

Expenses

Decrease in economic benefits of the entity in form of outflows, deletions of assets or increases in liabilities

Assets

Resources controlled by entity as a result of past events and from which future economic benefits are expected to flow

Liabilities

Present obligations of entity that are results of past events and of which an outflow of economic benefits is expected

Equity

Residual interest in the assets after deduction of the Liabilities

Accounting Equations

A=E+L

Accounting Standards

- SSAPs


- FRSs


- IASs


- IFRSs

Purposes of accounting standards

- to provide accounting framework / rules


- to standardise financial statements


- to reduce variations


-to enable compliance with Companies Act


- to provide users with data that is comparable

Carrying amount

Amount at which asset is recognised less accumulated depreciation

Impairment loss

Amount by which the carrying amount exceeds its recoverable amount

Recoverable amount

Higher of assets fair value less costs of disposal and its value in use

Impairment, external sources

- fall in assets value


- adverse effects on entity caused by technology, markets, economy, laws

Gross profit %

Gross profit / revenue x 100

Expense/revenue %

Specified expense/ revenue x100

Operating profit %

Profit from operations/revenue x 100

Return on capital employed

Profit from operations \ (total equity + non-current Liabilities) x 100

Return on shareholders funds

Profit after tax \ total equity x 100

Current ratio

Current assets\current Liabilities = x:1

Acid test ratio

Current assets - inventories \ current Liabilities = x:1

Inventories holding period (days)

Inventories / cos x365

Inventory turnover

Cos/inventories = x times

TR collection period

Tr/revenue x 365

TP collection period

TP/COS x 365

Working capital cycle

Inventory days + receivable days - payable days

Asset turnover non current

Revenue