(Tiểu luận) topic statistics of knowledge of chapter 1 of the course

For example, the benchmark scores of the group of Accounting - Finance and Banking majors at the 2 campuses of Foreign Trade University FTU - Hanoi campus and Foreign Trade University FT

THUONG MAI UNIVERSITY INSTITUTE OF INTERNATIONAL TRAINING

- 

-DISCUSSION TOPIC

PRINCIPLES OF ACCOUNTING COURSE (ENGLISH)

TOPIC STATISTICS OF KNOWLEDGE OF CHAPTER 1 OF THE COURSE

GROUP: 1

CODE OF THE CLASS: 23100FACC0112

INSTRUCTORS: Mrs.Lê Th Th ị ươ ng

Hanoi, November 2022

MEMBERS OF THE GROUP 1

2 Nguyễn Duy Anh 21K660002 A

3 Nguyễn Ngân Anh 21K660003 A

4 Nguyễn Thị Thảo Anh 21K660004 A

5 Trịnh Kiều Anh 21K660005 A

6 Ngô Thị Phương Anh 21K660006 A

7 Nguyễn Tuấn Anh 21K660008 A

Table of Contents

Content

A BASIC FEATURES

I NAME AND OBJECTIVES OF THE COURSE 6

II THE KEY KNOWLEDGE IN CHAPTER 1 6

1 Introduction of Accounting 6

1.1 Definition of Accounting 6

1.2 Types of Accounting 7

2 Accounting Assumptions and Principles 10

2.1 Accounting Assumptions 10

2.2 Accounting Principles 11

3 Qualitative Characteristic of Financial Information 13

3.1 Fundamental Qualitative characteristic 13

3.2 Enhancing Qualitative Characteristic 14

B SOME OTHER FEATURES OF ACCOUNTING PRINCIPLES I THE SAME POINT OF TWO PROGRAMS 16

1 Definition 16

2 Users of Accounting 16

II THE DIFFERENCE BETWEEN THE TWO PROGRAMS 16

1 Users of Accounting 16

2 Types of Accounting 17

3 Accounting Assumptions and Principles 18

4 Qualitative characteristic of financial information 20

Documentation

Opening Words

Accounting is a very popular profession in our life since ancient times and still exists today Accounting plays a very important role in the operating system of both the company in the enterprise and the state Currently, accounting is one of the hot topics that are always at the top of the fields with the highest standards at universities specializing in economics in Vietnam For example, the benchmark scores of the group of Accounting - Finance and Banking majors at the 2 campuses

of Foreign Trade University (FTU) - Hanoi campus and Foreign Trade University (FTU2) - Ho Chi Minh campus with 27.8 and 28.25 respectively (original combination A00, scale 30); the benchmark score at the National Economics University (NEU) with the level of Accounting is 27.4/30; The benchmark score of the Thuong Mai University (TMU) is also quite high with the score for Business Accounting, Public Accounting, Corporate Accounting (High-Quality Program), Accounting (Corporate Accounting) - ICAEW CFAB (Program integration) in the range of 25.0-26.2/30; so on That is a welcome signal of the accounting industry that has never ceased to be hot for candidates

And when entering the university gate, students not only majoring in Accounting but also some other economic majors must have undergone the subject

of Principles of Accounting It is a basic subject for students when studying economics, it brings the most basic of knowledge, principles, and operations of accounting in businesses and companies to businesses Therefore, the knowledge is quite heavy, and the students often face many difficulties when faced with a large amount of knowledge in this module

For our group, there were many difficulties when studying this part because

we studied this part in English with foreign textbooks With the topic that she assigned to our group, which was to summarize the knowledge of chapter 1 of the module Principles of Accounting (English), we chose the method of underlining keywords, giving specific examples , and comparing the points Similarities and differences between the knowledge of Principles of Accounting (English) and Principles of Accounting(Vietnamese) to see the clear difference between knowledge in Foreign and Vietnam

In the process of making the discussion topic, the group of group 1 tried to understand the material, build the most effective method to study chapter 1 of this module, and make sure that errors cannot be avoided certain We hope to receive many comments and suggestions to improve the discussion further

Group 1 sincerely thanks!

Content

A BASIC FEATURES

I NAME AND OBJECTIVES OF THE COURSE

- Name of the course: PRINCIPLES OF ACCOUNTING (ENGLISH)

- Objectives of the course:

Show you that accounting is the system used to provide useful financial information

After studying this chapter, you should be able to: Introduction of accounting, Accounting assumptions and principles, Qualitative Characteristic of financial information

II THE KEY KNOWLEDGE IN CHAPTER 1

1 Introduction of Accounting

1.1 Definition of Accounting

ACCOUNTING is a way of recording, analysing and summarising the transactions of an entity (a term we shall use to describe any business organisation)

Transactions: Recorded in books of original entry  analyzed and posted tothe ledgers  summarized in the financial statements

* Recorded in books of original entry is a Day-to-day record of financial transactions of a business Example: There are revenues and expenditures recorded inthe original book so there are many different examples A more concrete example, cashdiary Cash diary is The books of original entry where all types of payments & receipts done through the medium of cash are recorded and maintained For the period of entry of a record, every transaction that involves the movement in or out of the cash from the organization is booked in the cash journals with all the supporting evidence

* Ledger is a book used to record economic and financial transactions arising in each period and in an accounting year according to the accounting accounts specified

in the accounting account regime applicable to enterprises

*Financial statements are reports prepared by a company's management to show the operating situation and financial picture itself at a point in time Example:

Discover more from:

Macroeconomics 80% (5)

40

PHÂN TÍCH TÁC ĐỘNG CỦA COVID-19 ĐẾN GDP…

33

1.2 Types of Accounting

Financial Accounting provides economic and financial information for

investors, creditors, and other external users The information needs of external

users vary considerably The results of financial transactions that occur during

an accounting period are summarized in financial statement (balance sheet,

income statement, cash flow statement)

Macroeconomics 80% (5)

*Balance sheet is A balance sheet is a financial accounting statement that allows professionals to look at a company's liabilities, assets, and equity Example:

*Income Statements is a financial statement that shows you how profitable your business was over a given reporting period It shows your revenue, minus your expenses and losses Example:

* Cash flow statement is is a state that reports on the use of monetary assets such

as cash and cash equivalents categorizing the changes by activities and indicating the net change of such magnitude in the exercise Example:

Managerial Accounting provides internal reports to help users make decisions about their companies Examples are financial comparisons of operating alternatives, projections of income from new sales campaigns, and forecasts of cash needs for the next year.

*Sale campaigns are special short term designed strategies to trigger the sales conversion

Users of Financial Information

Users of Financial Statement

- HM Revenue & Customs (HRMC): Her Majesty's Revenue Services,

is responsible for collecting taxes, paying child benefits, enforcing tax and customs laws, and enforcing the payment of minimum wage by employers

- Owners: is an individual, legal entity, or other subject that has theright to possess, use and dispose of a property or a block of property recognized by law

- Bodies: A workplace is a place or space where an employee must

be present to perform his/her labor obligations, as agreed between the parties or at the request of the employer

- Financial analysts & advisers:

A financial analyst is a person who collects, reports, analyzes information, makes business recommendations for an organization, based on analysis of factors such as market trends, the financial condition of the business and the predicted outcome for a certain type of transaction

A financial advisor is your financial planning partner To accomplish your goals, you may need a financial advisor to help make these plans a reality This is where a person of expertise comes in You and your advisor will discuss a variety

of topics together

…

External Users & Internal Users

- External Users: Financial accounting provides external users with

financial statements Include: Lenders, Consumer Groups, Shareholders, External Auditors, Governments, Customers

- Internal Users: Managerial accounting provides

information needs for internal decision makers Include:

Managers, Sales Staff, Sales Staff, Budget Officers, Internal

Going concern concept: Concept assumes The entity is

reviewed as continuing in operation for the foreseeable future

It is assumed that the entity has neither the intention nor the

necessity of liquidation or ceasing to trade

Preparing a normal set of accounts

Unless

The entity is being liquidated or has ceased trading, or

The directors either intend to liquidate the entity or to cease trading Scale down operations in a material way

BREAK-UP BASIS (the reasons why the entity not consider

to be a going concern)

Accrual basic:

The effects of transactions and other events are recognized when they occur (and not as cash or its equivalent is received or paid) and they are recorded in the accounting records and reported in the FSs of the periods to which they relate)



Entities record when income or expenses are  earned or incurred in the reporting period to which they relate, not as the cash is paid or received



Accrual assumption, income earned must be matched against the expenses

incurred in earning it This is the matching convention.

*Matching convention is the basic rule underlying accrual accounting Revenues are recognized as earned All expenses incurred in earning those revenues are reported also in the period in which those revenues are recognized

2.2 Accounting Principles

Accounting Concepts and Convention

Materiality and Aggregation

Material: Information is material if omitting, misstating or obscuring it

Financial statements result from processing large numbers of transactions or other events that are then aggregated into classes according to their nature or function, such as 'revenue purchases', ' ', 'trade receivables' and 'trade payables'

*Revenue is the total amount of money received from carrying out the business operations such as sales On the income statement, it is also known as sales It is the top line figure as it is shown first on the income statement of any company Example: If you only sell your products to businesses, it's easier to create a sales funnel that outlines where your potential customers are in the buying process Businesses need to be more creative when considering how interested customers are in your brand, so you can track how many customers click on a link that redirects them to a survey they have can be done on your website Overall, the revenue you earn represents the success of your marketing and sales efforts

*Purchases is a routinely operation carried by both individuals and corporations The purpose of this financial transaction is to transfer the ownership of a piece of property physical, intellectual, virtual or else By purchasing the property, the owner has the right to use it or dispose of it according to his will and purpose Example: In accounting, we must distinguish between purchases as explained above and other purchases, such as purchases of fixed assets (e.g machinery or factory buildings) Such purchases are capitalized in the entity's financial position(that is, recognized as an asset of the entity) rather than as an expense in the income statement

*Trade Receivables are defined as the amount owed to a business by its customers following the sale of goods or services on credit Also known as accounts receivable, trade receivables are classified as current assets on the balance sheet Example: when you sell credit to different customers, this amount will be added

to the total accounts receivable and when you receive it from the customer, this amount will be reduced

*Trade Payables is an amount billed to a company by its suppliers for goods delivered to or services consumed by the company in the ordinary course of business These billed amounts, if paid on credit, are entered in the accounts payable module of a company's accounting software, after which they appear in the accounts payable aging report until they are paid Any amounts owed to suppliers that are immediately paid in cash are not considered to be trade payables, since they are no longer a liability Example: If a company owes goods and services but the amount has not been credited to Accounts Payable at the end

of each accounting period, the amount must be recorded with an adjustment entry.The credit portion of the adjustment entry is may be charged to a separate currentliability account, such as Expense and Liabilities

Consistency of presentation : the presentation and classification of items in the financial statements should stay the same from one period to the next, unless:

There is a significant change in the nature of the operations, or a review

of the financial statements indicates a more appropriate presentation, or

A change in presentation is required by an IFRS standard

Example: A significant acquisition (or disposal), or a review of the

presentation of the financial statements, might suggest that the financial statements need to be presented differently

Historical cost : Transactions are recorded at their cost when they were incurred

A basic principle of accounting is that the monetary amount at which items are often measured in financial statements is at historical cost.Example: The value of indicators on assets, liabilities, expenses, etc is reflected according to the price at the time of purchase of that asset, not the value at the time of determining the asset's price according to the market price Corporate accountants are not allowed to arbitrarily adjust the historical cost of assets, unless otherwise specified in the accounting law or accounting standards The historical cost of tangible fixed assets purchased from outside will be determined based on the source of asset formation:Original price = Purchase price calculated on the invoice + Installation andtest costs - Discounts (if any)

3 Qualitative Characteristic of Financial Information

Qualitative characteristics are the qualities or attributes that make financial

accounting information useful to the users

The objective is to ensure that the information is useful to the users in making economic decisions

3.2 Enhancing Qualitative Characteristic

- Comparability: it should be possible to compare an entity over time and

with similar information about other entities Example: A company that values its inventory on a FIFO basis may choose to disclose the value of its inventory using the weighted average method This would allow an analyst

to adjust a company's financial statements to make them comparable to those of a peer company using the weighted average method

- Verifiability: if information can be verified (e.g through an audit) this

provides assurance to the users that it is both credible and reliable

Example: Verification of accounting information can be either direct or

in-direct The verification of accounting information can be direct or inin-direct

eg, cash on hand would be direct verification, direct verifiable

depreciation, direct or indirect verifiable inventory.

- Timeliness: information should be provided to users within a timescale suitable for their decision making purposes Example: Users of accounting information must be provided with timely financial statements to ensure that their financial decisions are based on up-to-date information This can

be achieved by reporting the financial performance of companies with sufficient periodicity (e.g quarterly, semiannually or annually) depending