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 OF THE COURSE GROUP: CODE OF THE CLASS: 23100FACC0112 INSTRUCTORS: Mrs.Lê Thị Thương Hanoi, November 2022 MEMBERS OF THE GROUP ORDINAL NUMBER STUDENT CODE 21K660001 21K660002 21K660003 21K660004 21K660005 21K660006 21K660008 NAME Hà Mai Chúc An Nguyễn Duy Anh Nguyễn Ngân Anh Nguyễn Thị Thảo Anh Trịnh Kiều Anh Ngô Thị Phương Anh Nguyễn Tuấn Anh ASSESS A A A A A A A Table of Contents Opening Words 2|Page Content A BASIC FEATURES I NAME AND OBJECTIVES OF THE COURSE II THE KEY KNOWLEDGE IN CHAPTER Introduction of Accounting 1.1 Definition of Accounting 1.2 Types of Accounting Accounting Assumptions and Principles .10 2.1 Accounting Assumptions 10 2.2 Accounting Principles 11 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 Definition .16 Users of Accounting .16 II THE DIFFERENCE BETWEEN THE TWO PROGRAMS 16 Users of Accounting .16 Types of Accounting .17 Accounting Assumptions and Principles .18 Qualitative characteristic of financial information 20 3|Page Conclusion Documentation 4|Page 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 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 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 tried to understand the material, build the most effective method to study chapter 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 sincerely thanks! 5|Page 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 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 to the 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 in the original book so there are many different examples A more concrete example, cash diary 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: 6|Page Document continues below Discover more from: Macroeconomics ma101 Trường Đại học Thươn… 97 documents Go to course NGHIÊN CỨU SỰ ẢNH 44 HƯỞNG CỦA CÁC NHÂN… Macroeconomics 97% (72) Take Their Money Book 143 typos Macroeconomics 22 100% (9) Đề toán, tiếng việt HS làm nhà Macroeconomics 100% (6) De cuong Quan tri hoc Summary… Macroeconomics 100% (3) Yếu tố ảnh hưởng đến 40 hành vi mua laptop của… Macroeconomics 33 80% (5) PHÂN TÍCH TÁC ĐỘNG CỦA COVID-19 ĐẾN GDP… Macroeconomics 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) 7|Page 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: 8|Page *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: 9|Page 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 the right 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 Auditors, Controllers Accounting Assumptions and Principles 2.1 Accounting Assumptions Accounting Concepts and Convention 10 | P a g e 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 could, individually or collectively, reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements Materiality depends on the size or the nature of an item, or a combination of both, could be the determining factor 11 | P a g e 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 current liability 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: 12 | P a g e 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 and test costs - Discounts (if any) Qualitative Characteristic of Financial Information 3.1 Fundamental Qualitative characteristic 13 | P a g e 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 indirect The verification of accounting information can be direct or indirect 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 14 | P a g e on the size and complexity of the operations business Unreasonable delays in reporting accounting information to users must also be avoided - Understandability – information should be understandable to those that might want to review and use it This can be facilitated through appropriate classification, characterisation and presentation of information 15 | P a g e B SOME OTHER FEATURES OF ACCOUNTING PRINCIPLES Each country is different, book knowledge teaches students with different orientations for optimal development And so is Vietnam, the way of teaching, the curriculum is also different from other countries when it has the same subject name Many people think that Vietnam possesses a larger and heavier amount of knowledge than foreign textbooks, so what are the basic similarities and differences between chapter and the amount of knowledge contained in the Principles of Accounting (English) module ? I THE SAME POINT OF TWO PROGRAMS Definition Basically, both programs have the same definition of accounting What accountants need to do, what to and there are more duties of accountants in the definition Accounting (Vietnamese is Kế Toán) is in charge of recording, receiving, processing and providing information reflecting the financial performance of an organization, enterprise, state agency, agency or organization, private business… Users of Accounting Regarding the content of Users of Accounting, both learning materials are exactly the same All of two programs have two types of Users of Accounting: External Users and Internal Users II THE DIFFERENCE BETWEEN THE TWO PROGRAMS Users of Accounting In Vietnamese curriculum, the External Users section is divided into parts to help students distinguish and avoid confusion as follows: Entities with direct interests in the accounting unit, including: Customers; Suppliers of materials, assets and services; Investors (shareholders, joint venture partners ); Creditors (banks, finance leasing companies ); Workers Objects of this type need economic and financial information about the accounting unit to make business decisions related to the accounting unit, in accordance with their interests Example : The bank decides to allow the owner of the company to open a private company Entities with indirect interests in the accounting unit, including: State management agencies (tax offices, research institutes, ministries, departments ) Accounting information plays a very important role in helping the State check and collect enough amounts payable by accounting units to carry out national activities; policy making, laws, 16 | P a g e Example: Households pay electricity bills each month to the state, at this time the accountant has the control function Types of Accounting In this regard, a marked difference was shown - Principles of Accounting (Foreign Program) have two types: Financial Accounting Managerial Accounting - Principles of Accounting (Vietnamese Program) have four types: According to the way of taking notes, receiving information, including: Single-entry Accounting (Vietnamese is “Kế toán ghi đơn“): is a type of accounting that records and receives information about economic and financial transactions independently and separately for each accounting object Single-entry accounting does not reflect the relationship between different accounting objects Single-entry accounting is practiced from the very beginning of accounting, to record production and exchange activities Today, single-entry accounting is still practiced to record and reflect information on economic and financial activities related to the assets of the entity in a detailed and specific manner, meeting the requirements of the company manage Double-entry Accounting (Vietnamese is “Kế toán ghi kép”): is a type of accountant that records and receives information about economic and financial transactions according to the correct content and dialectical movement between accounting objects Double accounting was implemented at a time when accounting had developed along with the development of commodity production And these days, double accounting is very common to record and obtain information on economic and financial activities related to the assets and capital sources of the entity at a general level, to meet the needs of the company management request According to the level and nature of information, including: 17 | P a g e General Accounting (Vietnamese is “Kế toán tổng hợp”): is a type of accounting in which accounting information is recorded, income is based on aggregate economic indicators, by a measure of value Detailed Accounting (Vietnamese is “Kế toán chi tiết): is a type of accounting in which information is received, processed, and provided in a detailed and specific form about a general indicator performed by the general accountant Detailed indicators can be expressed in monetary, in-kind, or labor measures According to the scope of accounting information provided, including: Financial Accounting (Vietnamese is “Kế tốn tài chính“): is a type of income accounting, which processes, examines, analyzes and provides economic and financial information by means of financial statements to subjects who need to use information of the accounting unit maths The product of financial accounting is an entity's financial reporting system Therefore, the subjects that often use information provided by financial accounting are investors, suppliers, customers, creditors, outside the accounting unit Financial accounting often uses one type of measure, a measure of value Managerial Accounting (Vietnamese is “ Kế toán quản trị“): is a type of income accounting, information processing, analysis, and provision of economic and financial information according to management requirements and economic and financial decisions within an accounting unit The products of management accounting are reports on each aspect, each part of the business process, serving the internal management functions of the unit: planning, execution, inspection, and evaluation planning situation, helping the business unit in the right direction, and exploiting and effectively using all the resources of the unit According to the nature and content of professional profession, including: Public Accounting (Vietnamese is “Kế tốn cơng“): is a type of accounting conducted in non-commercial, non-profit operating units Public accounting is used in 18 | P a g e administrative and non-business units of Ministries, Departments, Boards, branches, State organizations, and social organizations, Corporate Accounting (Vietnamese is “Kế toán doanh nghiệp“): is a type of accounting conducted in units that operate for a business nature, for-profit purposes Those are businesses in different economic sectors In general, accounting is divided into more parts than recorded in the program in Vietnam, but it is easy to confuse students Through this section, we can see that the types of accounting in foreign countries are divided into categories and are in the section “According to the scope of accounting information provided“ From that, we can see, the international program has been shortened compared to the program in Vietnam Accounting Assumptions and Principles - Principles of Accounting (Foreign Program) have Accounting Assumptions are: Going Concern Concept Accrual Basic and; have Accounting Principles, including: Materiality and Aggregation Consistency of presentation Historical Cost - Principles of Accounting (Vietnamese Program) have types of Accounting Principles, and zero Accounting Assumptions: Accrual Basic Principle (Meaning “Nguyên tắc sở dồn tích“): same Accounting Assumptions (Principles of Accounting - Foreign Program) Going Concern (Meaning “ Nguyên tắc hoạt động liên tục“): same Accounting Assumptions (Principles of Accounting - Foreign Program) Cost Principle (Meaning “Nguyên tắc giá gốc“): According to this principle, assets are recognized at cost The cost of an asset is measured at the amount of cash or cash equivalents paid or payable or at the fair value of the asset at the time the asset is recognized Thus, when applying the original cost principle, the value of assets can only be assessed based on cash or cash equivalents If the compensation for an asset or service is cash, the cost is assessed according to the amount of cash spent to obtain the asset or service If the compensation for an asset or service is not cash (other property, financing, etc.), the cost is assessed at cash value equivalent to the market value of the exchange or object receive This principle is based on the principle of Going Concern With the assumption of a continuous enterprise, on the financial statements, the values of the 19 | P a g e