BA3 Flashcards
What is strategic management ?
Most senior level
In a commercial entity = senior board of directors
Need info to assist with major decisions
What is tactical management?
Middle management
Require info to monitor performance
Interest in short - medium term targets
What is operational management?
Responsible for control and day to day activities
Hours worked etc
Products produced etc
Three aspects of accounting
Recording
Reporting
Forecasting
How often are financial accounts prepared?
Annually (six monthly or quarterly in some countries)
IASB Framework liability definition
A present obligation of the entity to transfer an economic resource as a result of past events
IASB Conceptual Framework 5 elements of the financial statements
(Statement of Financial Position)
Assets
Liabilities
Capital
(Statement of P&L)
Income
Expenses
IASB Framework definition of an asset
A present economic resource controlled by the entity as a result of past events
An economic resource is a right that has the potential to produce economic benefits
Examples of assets
Land
Buildings
Plant and machinery
Motor vehicles
Tangible assets
Physical items - can be seen/touched
Land
Buildings
Equipment
Inventory
Intangible assets
Cannot be seen or touched
A license or brand
Trademarks
Patent
Accounting equation
Capital = assets - liabilities Assets = liabilities + capital Liabilities = assets - capital
Where are capital transactions recorded?
Statement of financial position
As non-current assets
Example of revenue transactions
Recorded where ?
Wages
Rent payables
Vehicle running costs
Recorded as expenses in statement of P&L
Profit equation
Sales revenue - cost
