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25 Cards in this Set
- Front
- Back
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INCOME |
Increase in economic benefits of the entity in form of inflows, enhancements of assets, decreases of Liabilities |
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Expenses |
Decrease in economic benefits of the entity in form of outflows, deletions of assets or increases in liabilities |
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Assets |
Resources controlled by entity as a result of past events and from which future economic benefits are expected to flow |
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Liabilities |
Present obligations of entity that are results of past events and of which an outflow of economic benefits is expected |
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Equity |
Residual interest in the assets after deduction of the Liabilities |
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Accounting Equations |
A=E+L |
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Accounting Standards |
- SSAPs - FRSs - IASs - IFRSs |
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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 |
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Carrying amount |
Amount at which asset is recognised less accumulated depreciation |
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Impairment loss |
Amount by which the carrying amount exceeds its recoverable amount |
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Recoverable amount |
Higher of assets fair value less costs of disposal and its value in use |
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Impairment, external sources |
- fall in assets value - adverse effects on entity caused by technology, markets, economy, laws |
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Gross profit % |
Gross profit / revenue x 100 |
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Expense/revenue % |
Specified expense/ revenue x100 |
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Operating profit % |
Profit from operations/revenue x 100 |
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Return on capital employed |
Profit from operations \ (total equity + non-current Liabilities) x 100 |
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Return on shareholders funds |
Profit after tax \ total equity x 100 |
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Current ratio |
Current assets\current Liabilities = x:1 |
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Acid test ratio |
Current assets - inventories \ current Liabilities = x:1 |
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Inventories holding period (days) |
Inventories / cos x365 |
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Inventory turnover |
Cos/inventories = x times |
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TR collection period |
Tr/revenue x 365 |
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TP collection period |
TP/COS x 365 |
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Working capital cycle |
Inventory days + receivable days - payable days |
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Asset turnover non current |
Revenue |
