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integrative > accounting > Flashcards

accounting Flashcards

1
Q

what is the function of financial info

A
  1. informative (entrepreneur, investory, external creditors, supplier, customer)
  2. tax basis
  3. profit distribution
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2
Q

obligations to book keeping

A

<700 000 single entry
> 700.000 double entry+ accrual accounting (financial statement)
group also consolidated statement

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3
Q

principles of book keeping

A

causation: expenses when seen, revenues when realized
congruency: tax tules follow commercial accounting rules
realization: forbidden to book revenues before realized, losses in advance

IFRS:
no tax rules
matching: book matching expenses to revenues

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4
Q

accounting activties:

A
  • financial: loans, interest expense, issuing shares and bonds, treasury shares, paid in capitan, dividends
  • investing: income from financing acticties (dividends, interest income, securities), long-term assets
  • operating: sales, expenses, paying taxes, purchases
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5
Q

closing accounts

A
  • putting expenses and revenues on profit and loss account 9890 and afterwards put profit and loss account on balance sheet account 9850
  • put assets, equity and liability on 9850
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6
Q

balance sheet content debit side

A 
assets:
longterm:
-intangible 
-tangible
-financial fixed assets 
current assets:
-inventory
-receivables 
-asset securities 
-cash 
prepaid expenses 
deferred taxes

IFRS: current in order in which turnt jnto cash, then prepaid part then longterm

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7
Q

balance sheet credit side

A 
equity:
-paid in capital 
-revenue and capital reserves 
-net income
liabilties 
-allowances
-liabitlies like trade payables or loan or or prepayments
-unearned revenue

IFRS: first liability in order in which they decrease cash then equity

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8
Q

income statement content

A 
operating income:
-sales
-changes in inventory 
-own work capitalized
-other operating 
   -disposal of longterm assets
   -released allowances 
operating expense:
-cogs
-personell
-depriciation 
operating result 
financial income or expenses 
EBIT
tax 
after tax 
retained earnings 
release of reserves 
allocation to revenue reserves 
net income/loss
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9
Q

account numbers

A

assets: #x1xx-#2999
-longterm assets #100-#999
-current assets #1000-#2999
liabilties #3xxx
reveneues #4xxx
expenses #5xxx-#8xxx
equity #9xxx

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10
Q

cash flow statment (use)

A 
use:
determine futur cashflow 
how cash is generated 
use and origin of cash 
ablitiy to pay interest dividends and debt
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11
Q

cash flow (parts)

A

-cash flow:
equity old-new
operating cash flow: cash effect of revenues and expenses
-investing cash flow:
income from financial investments, purchase of long term and fixed financial investments
-financing cash flow:
interest expense, dividends, issuing of shares and bonds, repayment of capital and issuing of capital

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12
Q

direct method

A

liquid assets-outgoing payments+incoming payments

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13
Q

indirect method (general)

A

calculation start with income before tax
kick out everything that is not operating cash flow or no cash effect
-operating cash flow
-investing cash flow
-financing cash flow

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14
Q

working capital

A 
inventory 
receivable 
prepaid expenses 
liabilities 
allowances
unearned revenues
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15
Q

operating part cash flow stat

A 
\+depreciation 
-disposal of longterm assets 
-income of financial assets 
-prepaid expenses 
\+unearned
-receavable 
\+payables 
\+provision 
-tax payment 
-inventory
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16
Q

investing part cash flow

A 
\+disposal of longterm 
\+disposal financial investment 
-purchase of longterm assets
-purchase of financial assets 
\+income financial investment
\+interest income
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17
Q

financing part cash flow

A

-Dividend
-interest expense
+issuing of shares and bonds
-repayment of loan
+issuing share captial
-repaying share capital

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18
Q

practitioner method

A

net income- non-cash revenues+non-cash expenses

—> everything was bought with cash

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19
Q

free cash flow

A

cash free for financing anf investing activities or cash free after paying for planned investments and after dividends

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20
Q

what does a consolidation do, what do you do?

A

eliminate all internal processes

increase info for investors

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21
Q

consolidation rules and regulation (voluntarily)

A 
can prepare jnder austrian code or IFRS
voluntarily:
-future stock exchange listing
-foreign investors 
-compare with competitors
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22
Q

obligation for consolidation

A

-when listed on stock exchange
-groups
2 affiliated companies with uniform control or dominant rights
or when dominant influence
or when right to influence voting behaviour
or when shareholder and right du appoint majority of members of supervisiory
or majority of votings
-associated companies with 20% or more control
-subsidiary no matter what form

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23
Q

exemption from consolidation

A

essential: when influence less then 5%
size: 24 mio assets or 48 mio sales and 250 employees, net method: 20,40,250
inclusion: included in othrr companies stat,
importance: info only witt unproportionat effort or price, sub only got reselling

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24
Q

form of consolidated financial statement

A

entity principle:
as if one company
valuation principle:
with similar valuation concerning useful life or inventory principles
same date:
if prepared 3 months before or after have to consider intermin financial statement for this period

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25
Q

steps of consolidated financial statement

A
  1. hand in info to parent
  2. uniformity of strcuture, date, currency, consideration of positions
  3. elimination process
  4. minority interest
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26
Q

step 3 of consolidated finance stat

A

capital: investment vs assets of sub
debt: debt vs receivable
income: revenues vs expenses
interim profit: unrealised profit if inventory or assets purchased from other company
distribution: dividends

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27
Q

capital consolidation

A

investment of parent into sub has to be cleared

equity of sub assessed with fair present value

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28
Q

3 types of captial consolidation outcomes

A
  1. fair value - purchase price= goodwill
  2. proportionat realization of silent reserves
  3. negative difference
29
Q

minority interest in captial consolidation

A

everything proportionate to ownership

fair value * minority = minority interedt

30
Q

multistage group and capital consolidation

A 
when parent company is sub for another parent company 
problems:
-minority interest of one sub
-investment 
-differences from captial consolidation

performed one and repeated in the same way
still how to treat differences:
-depreciation of goodwill estimate or 10 years
-negative difference released by changing net income as soon as neg development is realised

31
Q

debt consolidation

A

can not own itself money or have receivable from itself

  • prepayments, longterm loans, allowances
  • differences: timing, positioning
  • minority not considered
32
Q

revenues and expenses consolidation

A

no intercompany revenues or expenses

  • rent, interest, matrrial, personnell
  • if goods delivered already sold no interim result has to be eliminated cause cogs already shown so only sales and material expense eliminated
33
Q

consolidation of interim results

A

if inventory not sold, just internal transfer, so sales need to be elominated

34
Q

consolidated cash flow

A

only for groups
add all results of individual cash flows and eliminate all changes due to consolidation
—> done for changes of intercompany effects (debt consolidation), minority interest and dividend payments

35
Q

use of financial statement analysis

A 
-decision making
compare with others
investment decision 
performance measure 
-creditors
able to meet payments
liquid enough to pay back loans
-stockholders
stock prices 
profitability 
dividends
36
Q

deficits of financial statement analysis

A

towards past
not up to date
figures to low because principle of causion
figures incomplete cause not qualitative figures
do not show accounting policies

37
Q

use of accounting policies

A 
increase result
-being sold
-getting bonus
-new credit 
decrease result
-save taxes 
-management buyout 
-share repurchase 
smoothing results 
reaching target results
38
Q

balance sheet related adjustments (financial statement analysis)

A 
short term:
-sell or purchase assets 
-change timing if expense
-pay back liabilities before year ends
long term:
-restructure organisation (joint ventures, sell parts of company)
-change longterm agreements
39
Q

wrong book keeping decisions

A

over or underestimation:
-forgot to report income increasing adjustments
-long term assets booked to short or long
-forgott expenses
wrong choice:
-over or underestimation of inventory
-underestimation of liabilities oder over of receivables
-new long term asset or just machine maintenance

40
Q

horizontal financial statement analysis

A

earlier period always 100%
compare multiple years with earliest the base or always two with younger one the base
percentage change

41
Q

vertical analysis

A

balance sheet total the base in income statement sales
always percentage of one in comparison to base
used for:
-evaluation ability to pay back liabilities
-evaluation of profitability
-evaluation of stock
-evaluation of ability to sell merchandise and collect receivables

42
Q

financial status ratios

A
  • current and longterm asset intensitiy
  • equity ratio and debt ratio
  • equity to debt ratio
  • depreciation rate
  • investment coverage ratio
  • degree of depreciation
43
Q

liquidity ratios

A
  • equity to fixed asset ratio
  • current ratio
  • quick ratio
44
Q

intensity of long and current assets

A

long term or current assets divided by total assets

-if high longterm asset not flexibile can not sell of long term quickly

45
Q

equity ratio and debt ratio

A

equity ratio= equity/equity and liab.
—> if high longterm intensitiy need high equity ratio so that long term financed with equity
—> negative if equity eaten up by loss and loan is bigger than assets

46
Q

debt to equity ratio

A

total liab/total equity

proportion of equity that is financing assets if over 100% assets rather financed witb debt

47
Q

depreciation rate

A

depreciation/average acquisition costs

  • depreciation policy
  • rather long useful life or short do decease income quicker
48
Q

investment coverage ratio

A

-does company invest devaluation of assets to keep them at a standard
investment-book value of disposal/depreciation

49
Q

degree of asset depreciation

A

accumulated depreciation/acquisition costs

50
Q

equity to fixed assets

A

equity/long term assets
—> are longterm assets financed by equity if under 100% add long term debt to see if it ar least is financed by long term debt
equity+long term liab/long term assets

51
Q

current ratio

A

current assets/current liabl
if it is under 100% means we have more current liab than current assets which means that we financed longterm assets with current liabilties also that we can not pay back current liab with current assets

52
Q

quick ratio

A

deduct invenotry from assets in current ratio because company should not have to sell inventory to pay back current assets

53
Q

profitability ratios

A 
gross profit margin
break even sales 
return on sales 
return on assets 
asset turnover
return on equity
54
Q

gross profit margin

A

gross profit(sales-cost of good sold)/sales

55
Q

break even sales

A

sum of all other expenses and revenues/gross profit margin

56
Q

return on sales

A

net income/sales
how much of sales left as net income
shows how well company manages expenses

57
Q

return on assets

A

net income+interest expense/average assets
how well company generates net income with assets
deduct interest expense to leave out financing aspect

58
Q

asset turnover

A

net sales/average assets

how much of sales genersted by assets

59
Q

return on equity

A

net income attributable to commonh stockholder/equity
how much return on each euro invested
if 100%= ROA

60
Q

leverage effect

A

increase ROE by substituting equity by liabiltiey which only works if the interest of the loan is below the ROA

61
Q

evaluating stock investments ratios

A

earnings per share
dividend pyout
price earning ratio
dividend yield on common stock

62
Q

earnings per share

A

net income attributable to common shareholder/shares outstanding

63
Q

dividend payout

A

anual divided/eps

measures percentage of earning paid to shareholders

64
Q

price earnings ratio

A

market price of share/eps

how long investor needs to earn back invested money

65
Q

dividend yield to common stock

A

annual dividend/ market price per share

percentage of stocks value that is return as dividend

66
Q

other ratios

A

inventory turnover&average days in inventory
acc payable turnover&average collection period in days
accounts receivable turnover&average collection period in days

67
Q

inventory turnover and average days

A

material expense/inventory
wie oft wird inventory pro jahr verkauft
365/ inventory turnover = wie lang zeug im invenotry is bevor es verkauft wird

68
Q

acc payables turnover

A

cogs/average acc payables

wie oft company ihre payables abbezahlt

69
Q

acc receivables turnover

A

credit sales/average receivables

wie oft comsony ihre receivables pro jahr verkauft

integrative (15 decks)

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