Chap 3 Flashcards
Revenue là gì?
a measure of the inflow of economic benefits arising from the ordinary activities of a business
-> benefits ni will result in tăng assets hoặc giảm liabilities
1 vài forms của revenue?
1/ sales of goods
2/ fees for services (vd của solicitor cố vấn PL)
3/ subscriptions (vd của 1 club)
4/ interest received (vd on an investment fund)
Expenses là gì?
Outflow of benefits
-> this loss of benefit results in giảm assets và tăng liabilities
1 vài types của expenses?
1/ cost of goods sold / cost of sales 2/ salaries and wages 3/ rent and rates 4/ motor vehicle running expenses 5/ insurance 6/ printing and stationery 7/ heat and light 8/ telephone and postage
Balance sheet vs income statement có closely related ko?
có
The period mà profit or loss đc measured gọi là?
reporting period/ acc period/ financial period
1 cách khác của acc equation?
Assets (at the end of the period)
= Equity (amount at the start of the period)
+ (sales revenue - expenses for the period)
+ Liabilities (at the end of the period)
Đặc điểm của Gross Profit?
1/ Gross Profit = Sales Revenue - Cost of sales
2/ Thể hiện profit from buying and selling goods
3/ Kqt đến any other revenues or expenses lquan tới business
Đặc điểm của Operating Profit?
1/ Operating Profit = Gross Profit - Other Expenses (OH)
2/ Overheads (OH) xảy ra khi operating the business. Hắn là mấy cái như salaries and wages, rent and rates,..
3/ Thể hiện profits generated during the period from the normal activities of the business
4/ Kqt đến income của business có đc từ activities which are not included in normal operations (vd như cost of financing the business, tiền từ investment)
Đặc điểm của Profit For The Year?
1/ = Operating Profit + Non-operating income - Interest on borrowings
2/ This is the income that is attributable to the owners và được thêm vô phần equity của balance sheet
Vd cho non-operating income?
- Interest received from investments (cộng)
- Interest on borrowings (trừ)
Profit For The Year còn gọi là?
Net Profit
3 measures of profit?
- Gross Profit
- Operating Profit
- Profit for the year/ Net Profit
Cost of goods sold tương ứng each items được identified at the time of the transaction/ at the time of sale. Ngoại trừ?
Small retailer. Vì họ thấy nó ko practical nên sẽ identify the cost at the end of the reporting period
Công thức cơ bản của cost of goods sold
1/ opening inventories + purchases (goods bought) = goods available for resale
2/ Goods available for resale - Closing inventories = Cost of sales
When dealing with the sale of goods or the provision of services, the main criteria (tiêu chí) for recognizing revenue là gì?
1/ the amount of revenue can be measured reliably
2/ it is probable that the economic benefits will be received
3/ ownership and control of the items should pass to the buyer. (chỉ apply where revenue comes from the sale of goods)
The business should recognise revenue at what point?
1/ When an order is received from the customer
2/ When the goods are delivered to, and accepted by the customer
3/ When the cash is received from the customer
(nên chọn cái số 2, vì hợp với 3 tiêu chí recognise revenue)
When the goods are delivered to, and accepted by the customer hợp vs 3 criteria for recognising revenue ntn?
1/ Buyer đồng ý với selling price -> revenue can be reliably measured
2/ Giao tới và acceptance of the goods dẫn tới ownership and control passing to the buyer
3/ Transfering ownership gives the seller legally enforceable rights that make it probable that the buyer will pay
Effect của applying 3 cái criteria?
Sale on credit đc ghi nhận trước khi cash is received
=> Total sales revenue ở IS có thể include sales transtractions mà chưa trả cash
=> Total sales revenue ở IS khác với total cash received from sales during that period (Do accruals convention)
Cash sales là gì?
Sales where cash is paid at the same time as the goods are transferred
For cash sales, there will be no difference in timing between reporting sales revenue and the cash being received. True or false?
True
Particular prob for businesses that undertake major long-term contracts?
If DN wait until the contract hoàn thành before recognising the revenue, IS could give a misleading impression of the wealth generated in the various reporting periods covered by the contract
Vd cho construction contract
khách hàng kí contract với builder to have a new factory built for 3 years
Ghi nhận revenue ntn trong construction contract?
Before the factory is completed miễn là việc xdung đc chia thành a number of stages and each stage can be measured reliably
-> as each stage is completed, the builder can recognise the price for that stage as revenue
Prob cho việc builder wait until the factory was completed before ghi nhận revenue?
the IS covering the final year of the contract sẽ ghi nhận tất cả revenue còn IS của preceding year (năm trước) sẽ ko ghi nhận gì => give a misleading impression vì ko phản ánh the work done during each period
Revenue from contracts for services đc ghi nhận in stages. True or false?
True
Nội dung matching convention?
Expenses should be matched to the revenue that they helped to generate
-> A particular expense reported in IS khác với cash paid
Accrued expenses (accruals) là gì?
Arise when the expense for the period is more than the cash paid during the period
