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Lecturer: Dr. Youngdeok Lim School of Accounting UNSW QUAD 3069 youngdeok.lim@unsw.edu.au
Blackboard: http://telt.unsw.edu.au.
Session 1, 2012
Welcome to Accounting and Financial Management 1A. In this first lecture you will be introduced to the lecture staff on the course and be given the Course Outline. We will be outlining the objectives of the subject, its structure and requirements as described in the Course Outline and answer any questions you may have about the course. We will be referring to the Woolworths 2007 Annual Report (WW2007) throughout the course. The annual report is included as an appendix in your course textbook (Trotman & Gibbons (T&G) pages 709-748). We will then begin to explore the nature of accounting and introduce general purpose financial reports.
Learning objectives
At the end of this topic you will be able to: Understand the overall course requirements and assessment tasks for this unit. Define Accounting Begin to become familiar with the Woolworths 2007 annual report and the information it contains. Be aware of key financial statements and the users of these reports. Understand the foundations of modern accounting practices including the underlying assumptions of financial reporting Begin to understand the accrual concept
Required Reading
ACCT1501: Accounting and Financial Management 1A: Course Outline Trotman & Gibbins Chapter 1: sections 1.1 to 1.4, & 1.9 - 1.11; Appendix 1 (WW2007)
AFM1A
2.
Preparation Questions You should attempt these questions before the tutorial. The answers to the preparation questions will be made available on the course website at the end of the relevant lecture week. In this way you can check your understanding of these questions before the tutorial class. You are welcome to raise any unresolved issues that you have with the preparation questions with your tutor. This will be important and essential information for you when you complete your reflection task. DQ 1.1, 1.2, 1.3, 1.7, P1.6, P1.16, C1A (1-7)
Tutorial Questions The answers to tutorial questions are the focus of the tutorial class work: DQ 1.12, 1.16, P1.7, P1.15, P1.25
AFM1A
AFM1A
''This reliance on external capital, combined with failing support by equity and debt investors as well as underwhelming financial performance, led to a liquidity crisis and was a major contributor to the failure of the ABC Group,'' the report said. The administrators said they have yet to determine exactly when ABC became insolvent. The second creditors' meeting, expected to vote to wind up ABC, is scheduled to be held June 2 at the Tattersall's Club in Brisbane.
AFM1A
Teaching staff Dr. Youngdeok Lim (Lecturer-in-Charge) Jeffrey Knapp (Lecturer) Dr. Tami Dinh Thi (Lecturer) Other tutors Wei, Jo, Radzi, Alex, Carone, Tara,
Amanda, Candice, Sunny, Brent, Wendy, Abarna, Rommo, Li, Bonnie, Cece, Abby, Michelle, Stella, Chloe, Karen, Dominic
Take a couple of minutes and introduce yourself to two people near you. Ask
them what tutorial group they are in & what else they are studying.
Required Texts
Lecture outlines and additional readings Available on Blackboard Trotman & Gibbins 4th Edition Practice Set
http://www.perdisco.com.au/home.asp All the instructions on how to log on and use Perdisco are covered in the Course Outline
Lectures are only a summary and are not a substitute for reading
Attempting
The lecture notes follow the lecture outline with space for you to make your own additional notes during the lecture Lecture notes will be posted on Blackboard. Lectures will be Podcast recorded with screen captures of the lecture slides. This is recommended as an additional resource not a substitute for face-to-face interaction in the lectures.
Your tutor will randomly choose 6 weeks to review your written answers to the assigned tutorial questions and preparation questions and mark the best 5 weeks (no half mark).
How Help
do you learn to drive or cook, is it by reading only? tutors help you, by proactively asking questions!
Interaction
Preparation & Tutorial Questions: Work you must do to pass the course !!
Note: DQ1.1 means Chapter 1, discussion questions 1. P1.6 refers to problems at the end of chapter 1. Let us try these P4.25 & P6.22 - How will you find these???
You must satisfactorily complete all assessment tasks and score a total mark of at least 50, including a satisfactory pass mark in the final exam.
This assignment is due May 11th @ 3pm 20 hrs work approx. Two Quizzes YOU must read the instructions!!!! The quiz will consist of 30 multiple choice questions. It is recommended to be completed in 60 minutes; however there will be no official time limit limit. One attempt. attempt
Important feedback!!!!
Important note
Additional resources
is only one opportunity to sit a supplementary final exam which will be held on 10 July 2012 exams for the School of Accounting after the final exam session. you are too ill to perform reasonably on the final exam, do not attend the final and apply for a supplementary instead.
If
Applying
for special consideration does not automatically mean that you will be granted a supplementary exam.
Blackboard http://telt.unsw.edu.au Announcements!!! your responsibility to read View preparation and tutorial solutions Use the Discussion board - 3 Categories
Course Course On-line
Student responsibilities:
Preparation for lectures & tutorials Workload and other commitments balance!!! Attendance 80% rule University & ASB Conduct and behaviour respectful to others at all
times in lectures, tutorials, via email and on Blackboard
Be quiet in my lecture for a student who wants to listen. To discourage unnecessary noise in my lecture, there will
What is accounting?
Accounting is the process of identifying, measuring, recording and communicating economic information to assist users to make decisions decisions.
Accounting System
Financial accounting will be the focus of this course. Financial accounting focuses on the provision of
information to users external to the enterprise.
Used by:
is extremely important!!
Management in making business decisions Shareholders for decision making Board of directors in takeover battles Bankers and creditors in lending decisions
New
Boards in rewarding and removing executives Management and unions in wage negotiations Impacts communities Impacts workers
Their
decisions are based on what value they are willing t either to ith buy b or sell ll shares h i in th the market k t
Can you think of other users of accounting information? And, for what purposes will they use the accounting
information?
Can you think of total salary of CEO of Woolworths for the year ended 26 June 2011?
25% 25% 25% 25%
Financial Statements
The Balance Sheet (Week 2) The Income Statement, (profit & loss, P&L) (Week 2) Statement of Cash Flows (AFM1B will cover in details if you
continue to study Accounting )
Assets
Current assets: Converted into cash in 1 year or operating cycle, whichever is longer
Cash, Account receivables, Inventories, Short-term investments
Assets
Liabilities
Liabilities
Stockholders Equity
Distribution of income
Operating activities
Sales, purchase activities
Sales revenue Service revenue, fees earned Resources or services used to generate revenue Operating and non-operating expenses Includes cost of
goods sold
Investing activities
Purchase and disposal of non current assets Purchase and disposal of securities
Expenses p
Financing activities
Issuance, retirement of bonds Issuance of stock
Revenue Operating expenses Operating income Non-operating income and expenses Net profit/loss
Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Change in cash Cash, beginning balance Cash, ending balance xxx xxx xxx xxx xxx xxx
Balance Sheet
Income Statement
Profitability
(The next 3 slides are extracts from your textbook view Appendix Woolworths Financial Statements p.709 in your T&G textbook to view the following slides in more detail)
Summary
What does double entry accounting achieve? For every transaction, there are two sides i.e. there is a
source for every resource. Resources = Sources
Example
accounting entity accounting period monetary historical cost going concern materiality.
The entity for which financial statements are prepared Activities of the entity are separate from those of its
owners/members
Includes, but not limited to, legal entities Economic entity a group of entities where the goals of
the controlling entity are pursued:
e.g.
Monetary assumption
Materiality assumption
There is no intention or need to liquidate Produces demand for financial information during life of
entity
Take away and coming upnext week! In profit measurement, private transactions of owners are not taken into account. What assumption/concept underlies this procedure?
25% 25% 25% 25%
Income Statement
Revenue (flow of income generated by selling goods or services) Expense (flow of expenses incurred in providing the goods or services for sale)