1. Accounting And Finance © 2015 albert-learning.com ACCOUNTING & FINANCE

2. Accounting And Finance © 2015 albert-learning.com Liabilities : Obligations of the firm to outsiders or claims against its assets by outsiders (debts of the firm). Assets : Resources of the firm that are expected to increase or cause future cash flows (everything the firm owns) Owners’ Equity : The residual interest in, or remaining claims against the firm’s assets after deducting liabilities (rights of the owners) Accounting : A process of identifying, recording, summarizing and reporting economic information to decision makers in the form of financial statements. Annual report : A document prepared by management and distributed to current and potential investors to inform them about the company’s past performance and future prospects. Vocabulary

3. Accounting And Finance © 2015 albert-learning.com  MANAGERS  OWNERS  INVESTORS  CREDITORS  GOVERNMENT REGULATORS Accounting information is useful to anyone who makes decisions that have economic results.

4. Accounting And Finance © 2015 albert-learning.com The balance sheet equation = Assets - Liabilities In Accounting, An Itemized Statement of What one owns and What one owes is called a Balance Sheet

5. Accounting And Finance © 2015 albert-learning.com Balance Sheet Reports What a Business: Owns – Assets Owes – Liabilities Worth – Owners Equity

6. Accounting And Finance © 2015 albert-learning.com  Revenue  Expense  Profit Income Statement reports how much you earned Last Year

7. Accounting And Finance © 2015 albert-learning.com What is the need for Accounting & Finance in a Business: AssessMonitor Forecast future

8. Accounting And Finance © 2015 albert-learning.com 1. Accounts receivable A. Borrowed money which the company must pay back within a year. 2. Prepaid expenses B. The money owed to a business by its clients 3. Account payable C. Intangible assets like a company’s brand name and established relationships with its suppliers 4. Stock / Inventory D. Costs paid in advance such as rent and interest 5. Plant & Equipment E. The money a company has received from outside investors for its shares 6. Share capital F. The money owed by a business to its suppliers 7. Goodwill G. The goods and materials that a business holds for the purpose of resale 8. Short-term debt H. What a company owns and uses to produce goods, such as factory and machinery. Match the following

9. Accounting And Finance © 2015 albert-learning.com  For a business enterprise, all the relevant financial information is presented in a structured format that is easy to understand. These are called ________. There are several important financial statements.  Managers want to know if a new product will be _____________  An outflow of cash or other valuable assets from a person or company to another person or company is an ___________  In Accounting, An Itemized Statement of What one owns, What one owes, What one s worth is called a _______________  ________ assets are physical things, for example machines and property. ________ assets are not physical in nature, for example a company's reputation 1)Expense Tangible 2)Financial Statements 3)Balance Sheet 4)Profitable 5)Intangible 6)Tangible Exercise

10. Accounting And Finance © 2015 albert-learning.com Reviewed By Reviewed On Comments / Changes Made Vidyesh11.09.2015N.A