Chapter 2
Accounting 2101 with Clark at Georgia State University
About this deck
By: Rachel Causey
Textbook:
Introduction to Accounting: An Integrated Approach
Created: 2011-09-23
Size: 26 flashcards
Views: 6
Textbook:
Introduction to Accounting: An Integrated ApproachCreated: 2011-09-23
Size: 26 flashcards
Views: 6
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3 phases of the management cycle
planning phase
performing phase
evaluating phase
Planning phase
setting goals & objectives for business activites
Performing phase
Completling the planned business activities & recording the results of those activites
Evaluating phase
Providing information to interested users to assess the success of the business activites
4 business processes
Business organization & strategy process
Operating process
Capital resources processes
Performance measurement & management`
Business organization and strategy process
Determines the plan of action for the company
Operating processes
Profit-making activities of the company
Capital resources processes
Financing & investing activities of the company
Performance measurement & management process
Balanced scorecard
Operating Sub-processes
Revenue process: Marketing/sales/collection/customer service process (resources provided)
Conversion process (resources used)
Purchasing/human resources/payment process (resources acquired)
Financing process
Borrowing money
owner/shareholders investing in the company
Investing
creating the infrastructure to support operating activites (buying & selling long-term assets)
Balanced scorecard
Holistic approach to planning and measuring performance
Evaluating how a company is doing
4 perspectives of balanced scorecard
- Financial
- Internal
- Customer
- Learning and growth
Financial perspective measurements
Return on investment ratio (net income & assets)
Quick ratio (liquid assets to current liabilities)
Return on owners' equity (net income & owners' equity)
Gross margin (gross margin to sales)
current/debt to equity/return on sales
Internal perspective measurements
Value-added vs. non-value added time (customer response time)
Activity ratios
Quality (prevention, appraisal, internal & external failure)
3 Activity ratios
Accounts receivable turnover (Days in collection cycle)
Inventory turnover (days in selling cycle)
Accounts payable turnover (days in payment cycle)
Customer perspective measurements
Market share
Customer satisfaction
Customer loyality
Learning & growth perspective measurements
Research & development ($spent, new products developed)
Employee growth (training, continuing education)
Information systems (technology)
Internal control objectives
Promote operational efficiency
Ensure the accuracy of accoutning information
Encourage management & employee compliance with applicable laws & regulations
5 procedures of Internal Control
Proper authorization
separating incompatible duties
maintaining adequate documentation
physically controlling assets & documents
providing independent checks on performance
Internal controls for cash
cash receipts
cash disbursements
bank reconciliation
Bank reconciliation
comparing the accounting record of cash to the banks records of the checking accounts
2 column bank reconciliation
adjust bank balance
adjust book (accounting records) balance
adjustments to the bank balance
outstanding checks (checks written by the company not processed by bank yet, subtract from bank balance
deposits in transit (" ", add to bank balance)
errors made by the bank
adjustments to the book (accounting) balance
interest earned (interet bearing checking, add to book)
service charges (fees charged by bank, subtract)
nsf checks (bounced checks, subtract from balance)
errors made by the company
About this deck
By: Rachel Causey
Textbook: Introduction to Accounting: An Integrated Approach
Created: 2011-09-23
Size: 26 flashcards
Views: 6
Textbook:
Introduction to Accounting: An Integrated ApproachCreated: 2011-09-23
Size: 26 flashcards
Views: 6
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“I have been getting MUCH better grades on all my tests for school. Flash cards, notes, and quizzes are great on here. Thanks!”
Kathy
Kathy