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Accounting Principles and Stakeholder Analysis Study Guide

Learn about fundamental accounting concepts like accruals and prudence, and understand how different stakeholders use financial information to make decisions. This guide covers internal and external stakeholder needs, including owners, management, employees, lenders, suppliers, customers, government, and competitors.

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The World of Accounting

Introduction to Financial and Management Accounting

This chapter explains the purpose of financial and management accounting and how to apply accounting principles, processes, and concepts to financial data.

  • Financial accounting
  • Management accounting
  • Bookkeeping
  • Accounting process
  • Accounting concepts
  • Accruals
  • Consistency
  • Going concern
  • Materiality
  • Money Measurement
  • Historical Cost
  • Realisation
  • Dual aspect
  • Business entity
  • Accounting principles
  • Relevance
  • Reliability
  • Comparability
  • Understandability
  • Non-current assets

Business Organisations and Financial Statement Interpretation

Accounting Accruals and Stakeholder Information Needs

This content explores accruals of income, provisions for doubtful debts, and the specific needs of internal and external stakeholders regarding financial and management accounting information.

  • Accruals of income
  • Provision for doubtful debts
  • Concept of prudence
  • Internal stakeholders
  • External stakeholders
  • Users of accounting information
  • Stewardship
  • Cash flow forecasts
  • Financial viability

Business Organisations and Financial Statement Interpretation

Interpret financial statements to review the performance of business organisations and report to stakeholders.

  • Sole trader
  • Partnerships
  • Limited companies
  • Public Limited Company (PLC)
  • Private Limited Company (LTD)
  • Third sector organisations
  • Unlimited liability
  • Limited liability
  • Income statement
  • Statement of financial position
  • Statement of cash flows
  • Appropriation account
  • Stakeholders
  • Internal stakeholders
  • External stakeholders
  • Ratio analysis
  • Direct costs
  • Indirect costs
  • Auditors
  • Directors

Financial Statement Interpretation and Ratio Analysis

This topic covers financial statement interpretation through ratio analysis to assess profitability, efficiency, liquidity, stability, and investor performance.

  • Profitability ratios
  • Gross profit margin
  • Operating profit margin
  • EBITDA margin
  • Return on capital employed (ROCE)
  • Efficiency ratios
  • Asset turnover
  • Inventory turnover
  • Trade receivables days
  • Trade payables days
  • Liquidity ratios
  • Current ratio
  • Quick ratio (acid test)
  • Stability ratios
  • Gearing
  • Investor ratios
  • Earnings per share (EPS)
  • Dividend yield

Cash Flow, Budgeting, Costing, and Pricing

Cash Flow, Budgeting, Costing and Pricing

This topic covers how to prepare cash flow forecasts and financial budgets, analyze costing and pricing methods, and apply break-even calculations to aid management decision making.

  • Cash flow forecasts
  • Cash inflows
  • Cash outflows
  • Organizational budgets
  • Sales budget
  • Purchases budget
  • Production budget
  • Trade receivables budget
  • Trade payables budget
  • Cash budget
  • Master budget
  • Variance analysis
  • Favourable variance
  • Adverse variance
  • Management by exception
  • Liquidity
  • Working capital
  • Pricing models
  • Cost plus pricing
  • Competitive pricing

Costing and Pricing Methods

An overview of costing and pricing methods including inventory control, valuation methods, and various accounting concepts.

  • Opportunity costs
  • Inventory control
  • Economic order quantity
  • Just in Time (JIT)
  • First in first out
  • Last in first out
  • Average Cost
  • Absorption costing
  • Marginal costing
  • Break-even analysis
  • Contribution
  • Cost plus pricing
  • Competitive pricing
  • Value based pricing
  • Variable costs
  • Fixed costs
  • Direct costs
  • Indirect costs
  • Whole-life costing

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