Professional Documents
Culture Documents
Introduction
Welcome to HI5001
In this session we look from an overview perspective, why we have accounting and who is
involved with accounting. We consider the various stakeholders and the basic accounting decision that they need to make.
communication technology Increasing demand for information of a non-financial nature by society Globalisation of business Adoption of international regulations including accounting standards
future decisions
Steps in decision-making
Establish goals
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ECONOMIC DECISIONS
Involve the use of economic resources
Must also consider
Personal taste Social factors Environmental factors Religious and/or moral factors Government policy
Service activity
Business Government Charities Clubs
Families
Process of identifying, measuring, recording and communicating economic information to permit informed judgements and economic decisions by users of the information
Recording
Recording, classification, summarisation
Communication
Accounting reports
Transactions
selling prices? How much profit is owing to outsiders? Will cash be available to pay debts as they fall due? What are benefits of owning vs leasing? This is more complex than you think as there are lease options (financial vs. operating)
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External users
Should I invest money in this business? Will the business be able to repay money lent to it?
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Insurance
Administrative costs Services to provide What to charge Potential customers
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Operating costs
Fuels and oils, repairs and maintenance Part-time employee $500 300 $800
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Clients
Lawn-mowing and trimming (regular) Gardening, with shredding (regular) Tree-lopping and shredding (as requested)
We can see that Darren has also considered how many clients he expects to have, and the type of services
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Now based on an understanding/expectation of the client list and the type of services required, he can then determine what fees to charge.
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Charges
Lawn-mowing Gardening Tree-lopping $45 90 135
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Based on these figures, Darren would expect over a 48-week year that his income will be; $1890 x 48 = $90,720 plus any tree-lopping jobs that comes up. As his earnings are more than $75K per annum, he will need to obtain an ABN from the ATO plus he will be required to collect GST. This will add to his costs and needs to be factored in (estimated to be $50.00 per week).
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With $800 per week for operating costs, plus the additional $50.00 for preparing annual tax return, GST documents, etc, (total of 2.4K per annum) meaning that his weekly outgoings are $850.00.
So if his incomings are $1,890pw, outgoings are $850, he is left with $1,040pw for himself. Plus any extra from tree-lopping.
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Accounting information assists owners and managers to effectively and efficiently run their business
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Position
Highly regulated
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Commercial accounting
Not-for-profit accounting
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Public accounting
Public accountants work in businesses which offer services to the public for a fee
Four main speciality areas
Auditing and assurance services
Taxation services Advisory services
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Budgeting
Taxation accounting Internal auditing and audit committees
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Not-for-profit accounting
Government accounting is concerned with the efficient use of resources consistent with the law applying at federal, state and local levels Other not-for-profit organisations include hospitals, churches, charities, clubs and private educational institutions.
These also have specialised accounting needs
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breach of confidence
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Tutorial
Topic 1 Accounting for Decision Making Reading:
Hoggett & Edwards Chapter One
Questions:
Hoggett & Edwards Exercises 1.3, 1.4, 1.5, 1.9 & 1.12 Communication/Group Activity Ethical Issues: Ethical practices among friends
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