Bài giảng Economics - Chapter 14 Accounting and Financial Statements

Chapter FourteenAccounting and FinancialStatements14-1Classification of AccountantsPublic A licensed independent professional who Accountant provides accounting services to the public (individuals or firms) for a fee. May be a CA throughout Canada or a CGA in certain provincesPrivate An accountant employed by a corporation, Accountant government agency, or other organization.14-2Chartered Accountant member of the Canadian (CA) Institute of Chartered AccountantsCertified General member of the Certified Accountant (CGA) General Accountant Association of Canada Certified Management member of the Society of the Accountant (CGA) Management Accountants of CanadaFavorite Recreational Activity by Chief Financial Officers at Large CorporationsActivity %Golf 21Reading 14Team sports 1014-3Source: Accountemps from November 15, 1998.Accounting InformationManagementLenders andsuppliers 14-4aPlan and set goalsOrganizeLead and motivateControlEvaluate credit risksAccounting InformationShareholders andpotential investorsGovernmentagencies 14-4bEvaluate soundnessof investmentsConfirm tax liabilitiesConfirm payroll deductionsApprove new issues ofstocks and bondsThe Users ofAccounting Information14-5Source: Adapted from Needles, Belverd E., Henry R. Anderson, and James C. Caldwell.Principles of Accounting, Fourth Edition. Copyright © 1990 by HoughtonMifflin. Used with permission.TaxauthoritiesFederalCCRAProvincialMunicipalOtherRegulatoryAgenciesProvincialSecuritiesCommissionsStockexchangesOtheragenciesEconomicPlannersFederalGovernmentPlannersBank of CanadaProv. Govt.plannersOthergroupsEmployeesand labourunionsFinancialadvisorsCustomersand thegeneralpublicManagementOwners, partnersBoards ofdirectorsOfficers of thecompanyManagersDepartmentheadsSupervisorsThose withDirect FinancialInterestPresent orpotentialinvestorsPresent orpotentialcreditorsThose with Indirect Financial InterestActions That Affect Business ActivitiesBusiness ActivitiesAccountingThe Accounting EquationAssets = Liabilities + Owners’ equity14-6Thingsof valuethat afirm ownsA firm’sdebts andobligationsThe differencebetween a firm’sassets and itsliabilitiesThe Accounting Cycle14-71. Examining source documents4. Preparing financial statements3. Posting transactions2. Recording transactionsMark’s Income Statement14-8Mark’s Balance Sheet14-9Ratio AnalysisProfitability ratiosAsset utilization ratiosLiquidity ratiosDebt utilization ratiosPer share data14-10Profitability RatiosProfit Margin = Return on Assets = Return on equity = 14-11Asset Utilization RatiosReceivables turnover = Inventory turnover = Return on equity = 14-12 Liquidity RatiosCurrent ratio = Quick ratio = 14-13 Debt Utilization RatiosDebt to total assets = Times interest =earned 14-14 Per Share DataEarnings per share = Dividends per =share14-15 Solve the Dilemmaa. Describe the two basic accounting statements. What type of information does each provide that can help you evaluate the situation?b. Which of the financial ratios are likely to prove to be of greatest value in identifying problem areas in the company? Why? Which of your company’s financial ratios might you expect to be especially poor?c. Discuss the limitations of ratio analysis.14-16Explore Your Career OptionsWhat contributions do accountants make to organizations?14-17Additional Discussion Questions and Exercises1. What is the accounting equation? Which financial statement (income statement or balance sheet) is most similar to the accounting equation?2. What is meant by the liquidity of assets?3. In measuring a firm’s performance, many investors and managers prefer industry analysis or industry ratios. What is the advantage in using industry ratios?14-18aAdditional Discussion Questions and Exercises4. How do public accountants, private accountants, and certified public accountants differ?5. What are some different types of liabilities?14-18bChapter 14 Quiz14-19a1. Which generally appears on an income statement? a. Assets = Liability + Owners’ equity b. Revenue - Expenses = Profit or loss c. Assets - Expenses = revenue d. Current assets/Current liabilities2. An accountant who provides accounting services to individuals and/or businesses for a fee is considered a a. freelance accountant b. public accountant. c. private accountant. d. local accountant.Chapter 14 Quiz14-19b3. Assume a firm’s inventory turnover was 25. That means a. the firm made a 25 percent profit on its sales. b. the firm has sold and replaced its inventory 25 times in a year. c. the firm has 25 items in inventory. d. the firm needs to sell 25 items in inventory to make a profit.4. The internal financial statement that forecasts expenditures and revenues for a period is known as a. a balance sheet. b. an income statement. c. a budget. d. an annual report.