Samenvatting boek + college aantekeningen 1CV10 ()

Fundamentals of Financial and Management Accounting
(1CV10)
Lecture 1:
Management accounting: interne verslaggeving (gericht op verstrekken van
financiële informatie binnen organisatie (manager))

Financial accounting: externe verslaggeving (gericht op verstrekken van
financiële informatie buiten organisatie (overheid, aandeelhouders))

Financial accounting Chapter 1, 2:

Financial statements:

- Statement of Cash Flows: cash flow statement
- Income statement: profit and loss account
- Statement of Financial Position: balance sheet
- Each statement provides a part of the picture of financial performance and
the position of the business
 Cash is a vital resource that is necessary for any business to
function effectively  so we need a Statement of Cash Flows
 But changes in cash do not give insights into the profit generated 
so we need an income statement
 The company is obligated to report the total wealth to investors, the
government, …  so we need a Statement of Financial Position

Statement of Cash Flows: the statement records all cash flows in a period

- related to the financial health of the company




Income statement: the statement records incomes and costs, calculation the
profit or loss in a period

- Gross profit: sales revenue – cost of goods sold
- General Expenses: bedrijfskosten (salaris etc.)
- Operating Earnings (EBIT): Gross profit – General Expenses
- Net Profit: profit after tax
- Revenues: value of the goods and services delivered to clients
- Expenses: the cost of all resources used to deliver the goods and services
- Profit = Revenues – Expenses

,The Statement of Financial Position (Balance Sheet): the statement
records assets (bezittingen/activa), liabilities (vreemd vermogen), and equity
(eigen vermogen)

- Related to the company’s wealth
- Assets = Current Assets (vlotte activa) + Non-Current Assets (vaste
activa)
 The resources of the business
- Claims = Equity + Liabilities
 The obligations of the business
- Assets = Claims
- Equity = Assets – Liabilities




Assets:

- Assets should be able to:
 Provide a right for the potential to receive economic benefits (zoals
inkomsten uit verkoop of kostenbesparingen)
 Be exclusive to the business (andere bedrijven maken er geen
aanspraak op)
 Control over the resource (het bedrijf kan bepalen wanneer en hoe
de economische voordelen worden benut
 Be capable of measurement in monetary terms (de waarde van de
activa moet in geld uitgedrukt kunnen worden)
- Non-current and current assets:
 Non-current assets: hold for a long period (property, computer
software, motor vehicles)

,  Current assets: hold for a short period (Cash at bank, trade
receivable (debiteuren), inventories)
- Tangible and Intangible Assets
 Tangible assets (tastbare activa): property, plant (fabrieken,
machines, etc.), inventories, cash
 Intangible assets (niet-tastbare activa): computer software,
patents
- Non-current Asset value accounting approaches:
 Net book value = historic costs (aanschafwaarde) –
depreciation (afschrijvingen)
 Market value = current market value

Claims:

- Equity: claims of the owners against the business
- Liabilities: claims of other parties

Equity:

- Share capital: stock of the shareholders
- Retained earnings: accumulated profits (winstdeel dat opnieuw wordt
geïnvesteerd in het bedrijf)
- Others: capital reserves, etc.

Liabilities:

- Current liabilities: for a short period (Short-term borrowings (korte
termijn leningen), trade payables (crediteuren), accured expenses
(Kosten die een bedrijf heeft gemaakt, maar die nog niet zijn betaald)
 Borrowing = lening
 Bank overdraft = Schuld aan de bank (negatief banksaldo) (cash
saldo = inkomende cash – bank overdraft)
- Non-current liabilities: for a long period (Long-term borrowings



Relation Balance Sheet, Income Statement and Cash Flow Statement:

, Financial accounting Chapter 3:

Ledger accounts:

- Ledger account looks like ‘T’ or is called T-
account
- Categories of Ledger accounts:
 Assets category, equity category,
liability category  for balance sheet
 Expenses category, revenue category  for income statement
- Debit and credit rules
 If assets or expenses(kosten) increase  ledger account is debited
 If equality, liabilities or revenues(omzet) increase  ledger account
is credited
 This works also vice versa
- Double-entry Keeping Rule: every transaction influences (at least) two
recording actions; debit and credit the same amount




Example: