1. FINANCIAL PLANNING FOR SENIOR MANAGERS ACCOUNTING METHODS AND FORMATION OF FINANCIAL STATEMENTS PAUL LOWER FOR ReCh MANAGEMENT CENTRE 1

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3. FINANCIAL PLANNING FOR SENIOR MANAGERS Fundamental requirement –Show “true and fair view” PAUL LOWER FOR ReCh MANAGEMENT CENTRE 3

4. FINANCIAL PLANNING FOR SENIOR MANAGERS Fundamental requirement –Show “true and fair view” –Prepared in accordance with: Generally Accepted Accounting Principles (GAAP) PAUL LOWER FOR ReCh MANAGEMENT CENTRE 4

5. FINANCIAL PLANNING FOR SENIOR MANAGERS Fundamental requirement –Show “true and fair view” –Prepared in accordance with: Generally Accepted Accounting Principles (GAAP) Standard Statement of Accounting Practice (SSAP’s) PAUL LOWER FOR ReCh MANAGEMENT CENTRE 5

6. FINANCIAL PLANNING FOR SENIOR MANAGERS Fundamental requirement –Show “true and fair view” –Prepared in accordance with: Generally Accepted Accounting Principles (GAAP) Standard Statement of Accounting Practice (SSAP’s) Financial Reporting Standards (FRS’s) PAUL LOWER FOR ReCh MANAGEMENT CENTRE 6

7. FINANCIAL PLANNING FOR SENIOR MANAGERS Four basic accounting concepts: –Going concern concept – assumes the business will continue PAUL LOWER FOR ReCh MANAGEMENT CENTRE 7

8. FINANCIAL PLANNING FOR SENIOR MANAGERS Four basic accounting concepts: –Going concern concept – assumes the business will continue –Accruals concept – income and costs matched PAUL LOWER FOR ReCh MANAGEMENT CENTRE 8

9. FINANCIAL PLANNING FOR SENIOR MANAGERS Four basic accounting concepts: –Going concern concept – assumes the business will continue –Accruals concept – income and costs matched –Consistency concept – same treatment one period to next PAUL LOWER FOR ReCh MANAGEMENT CENTRE 9

10. FINANCIAL PLANNING FOR SENIOR MANAGERS Four basic accounting concepts: –Going concern concept – assumes the business will continue –Accruals concept – income and costs matched –Consistency concept – same treatment one period to next –Prudence concept – full provision for all costs and losses PAUL LOWER FOR ReCh MANAGEMENT CENTRE 10

11. FINANCIAL PLANNING FOR SENIOR MANAGERS Accounting policies: –Sales income recognition PAUL LOWER FOR ReCh MANAGEMENT CENTRE 11

12. FINANCIAL PLANNING FOR SENIOR MANAGERS Accounting policies: –Sales income recognition –Depreciation of fixed assets PAUL LOWER FOR ReCh MANAGEMENT CENTRE 12

13. FINANCIAL PLANNING FOR SENIOR MANAGERS Accounting policies: –Sales income recognition –Depreciation of fixed assets –Stocks and work in progress PAUL LOWER FOR ReCh MANAGEMENT CENTRE 13

14. FINANCIAL PLANNING FOR SENIOR MANAGERS Accounting policies: –Sales income recognition –Depreciation of fixed assets –Stocks and work in progress –Research and development PAUL LOWER FOR ReCh MANAGEMENT CENTRE 14

15. FINANCIAL PLANNING FOR SENIOR MANAGERS Double entry bookkeeping –Each transaction represented by two entries PAUL LOWER FOR ReCh MANAGEMENT CENTRE 15

16. FINANCIAL PLANNING FOR SENIOR MANAGERS PAUL LOWER FOR ReCh MANAGEMENT CENTRE16

17. FINANCIAL PLANNING FOR SENIOR MANAGERS Double entry bookkeeping –Each transaction represented by two entries –Two simple rules apply: PAUL LOWER FOR ReCh MANAGEMENT CENTRE 17

18. FINANCIAL PLANNING FOR SENIOR MANAGERS Double entry bookkeeping –Each transaction represented by two entries –Two simple rules apply: DEBIT the account of the receiver of value PAUL LOWER FOR ReCh MANAGEMENT CENTRE 18

19. FINANCIAL PLANNING FOR SENIOR MANAGERS Double entry bookkeeping –Each transaction represented by two entries –Two simple rules apply: DEBIT the account of the receiver of value CREDIT the account of the giver of value PAUL LOWER FOR ReCh MANAGEMENT CENTRE 19

20. FINANCIAL PLANNING FOR SENIOR MANAGERS Traditional structure of accounts PAUL LOWER FOR ReCh MANAGEMENT CENTRE20

21. FINANCIAL PLANNING FOR SENIOR MANAGERS The Mega Toy Company PAUL LOWER FOR ReCh MANAGEMENT CENTRE21

22. FINANCIAL PLANNING FOR SENIOR MANAGERS Types of accounting entries made –Trading and non-trading PAUL LOWER FOR ReCh MANAGEMENT CENTRE 22

23. FINANCIAL PLANNING FOR SENIOR MANAGERS Types of accounting entries made –Trading and non-trading –Cash and non cash PAUL LOWER FOR ReCh MANAGEMENT CENTRE 23

24. FINANCIAL PLANNING FOR SENIOR MANAGERS PAUL LOWER FOR ReCh MANAGEMENT CENTRE 24

25. FINANCIAL PLANNING FOR SENIOR MANAGERS PAUL LOWER FOR ReCh MANAGEMENT CENTRE 25

26. FINANCIAL PLANNING FOR SENIOR MANAGERS PAUL LOWER FOR ReCh MANAGEMENT CENTRE 26

27. FINANCIAL PLANNING FOR SENIOR MANAGERS PAUL LOWER FOR ReCh MANAGEMENT CENTRE 27

28. FINANCIAL PLANNING FOR SENIOR MANAGERS PAUL LOWER FOR ReCh MANAGEMENT CENTRE 28

29. FINANCIAL PLANNING FOR SENIOR MANAGERS PAUL LOWER FOR ReCh MANAGEMENT CENTRE 29

30. FINANCIAL PLANNING FOR SENIOR MANAGERS PAUL LOWER FOR ReCh MANAGEMENT CENTRE 30

31. FINANCIAL PLANNING FOR SENIOR MANAGERS PAUL LOWER FOR ReCh MANAGEMENT CENTRE 31

32. FINANCIAL PLANNING FOR SENIOR MANAGERS PAUL LOWER FOR ReCh MANAGEMENT CENTRE 32

33. FINANCIAL PLANNING FOR SENIOR MANAGERS PAUL LOWER FOR ReCh MANAGEMENT CENTRE 33

34. FINANCIAL PLANNING FOR SENIOR MANAGERS PAUL LOWER FOR ReCh MANAGEMENT CENTRE 34

35. FINANCIAL PLANNING FOR SENIOR MANAGERS PAUL LOWER FOR ReCh MANAGEMENT CENTRE 35

36. FINANCIAL PLANNING FOR SENIOR MANAGERS PAUL LOWER FOR ReCh MANAGEMENT CENTRE 36

37. FINANCIAL PLANNING FOR SENIOR MANAGERS PAUL LOWER FOR ReCh MANAGEMENT CENTRE 37

38. FINANCIAL PLANNING FOR SENIOR MANAGERS PAUL LOWER FOR ReCh MANAGEMENT CENTRE 38

39. FINANCIAL PLANNING FOR SENIOR MANAGERS PAUL LOWER FOR ReCh MANAGEMENT CENTRE 39

40. FINANCIAL PLANNING FOR SENIOR MANAGERS PAUL LOWER FOR ReCh MANAGEMENT CENTRE 40

41. FINANCIAL PLANNING FOR SENIOR MANAGERS PAUL LOWER FOR ReCh MANAGEMENT CENTRE 41

42. FINANCIAL PLANNING FOR SENIOR MANAGERS PAUL LOWER FOR ReCh MANAGEMENT CENTRE42