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The family next door has both girl and boy children. Each of the boys has the same number of brothers as he has sisters AND each of the girls has twice.

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Presentation on theme: "The family next door has both girl and boy children. Each of the boys has the same number of brothers as he has sisters AND each of the girls has twice."— Presentation transcript:

1 The family next door has both girl and boy children. Each of the boys has the same number of brothers as he has sisters AND each of the girls has twice as many brothers as she has sisters. How many boys and girls are there?

2 ANSWER: 4 boys and 3 girls.

3  Prepare an income statement  Calculate adjustments following a share issue  Prepare statement of financial position  Identify the elements listed in the framework

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5  Income

6  Income is increases in economic benefits during the accounting period in the form of inflows or enhancements of assets, or decreases of liabilities that result in increases in equity. Not those relating from increases from shareholders.

7  Profit or Losses

8  Profits are increases in equity  Losses are decreases in equity

9  1.  2.

10  1. Relevance  2. Faithful representation

11  1. 2.

12  1. Relevance. For information to be relevant it must:  Be capable of making a difference in the decisions made by users  Help users to predict future outcomes  Help users to confirm previous evaluations. 2.Faithful representation -The information must Correspond to the effect of transactions or events As far as possible be complete, without bias, and free from error.

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15  Statement Accounting concept The financial statements do not include the personal assets and liabilities of those who play a part in owning or running the entity. The statement of comprehensive income shows the amount of expense that should have been incurred. The financial statements are prepared on the basis that there is no intention to reduce significantly the size of the entity. Low-cost non-current assets are charged as expenses In the statement of comprehensive income.

16  Statement Accounting concept The financial statements do not include the personal assets and liabilities of those who business entity play a part in owning or running the entity. The statement of comprehensive income shows the amount of expense that should have been accruals incurred. The financial statements are prepared on the basis that there is no intention to reduce going concern significantly the size of the entity. Low-cost non-current assets are charged as expenses In the statement of comprehensive Materiality income.

17 You are to fill in the missing figures for the following businesses: Assets Liabilities Equity £ £ £ Business A 50,500 17, Business B 64, ,600 Business C ,750 40,680 Business D 93, ,140

18 You are to fill in the missing figures for the following businesses: Assets Liabilities Equity £ £ £ Business A 50,500 17,250 33,250. Business B 64,900 29,300 35,600 Business C 66,430 25,750 40,680 Business D 93,270 40,130 53,140

19 Explain what each of the terms ‘assets’, ‘liabilities’ and ‘equity’ means. Assets Liabilities Equity

20 Explain what each of the terms ‘assets’, ‘liabilities’ and ‘equity’ means. Assets – a resource controlled by the entity as a result of a past event and from which future economic benefits are expected to flow to the entity. Liabilities – a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits.

21 Explain what each of the terms ‘assets’, ‘liabilities’ and ‘equity’ means. Equity – the residual interest in the assets of the entity after deducting all its liabilities. Users include managers, investors, suppliers, customers, lenders, employees, competitors.

22  The capital invested in a company by its owners, divided into individual shares.  Shares have a nominal and market value.  The nominal value is the face value, decided when the shares are issued and remains the same.

23  Shares are stated in the balance sheet at their nominal value.  The market value is the value at which it is traded on the stock exchange. This is irrelevant to the accounts

24  Authorised share capital is the maximum amount of share capital the company is permitted to issue.  Issued share capital is the nominal amount of share capital that has actually been issued to shareholders. (Allotted share capital is the same as issued share capital)

25  Entitle the holders to share in profits after all prior claims have been satisfied (creditors, preference shareholders).  They can vote in general meetings  Cannot be certain of the amount of their dividend.  In theory they can determine the policies of the company

26  Retained profits  Share premium account (non-dist)  Revaluation Reserve (non-dist)  General reserve (set up by directors)  Other reserves (set up by directors)

27 Issue at par: Dr: Bank Cr: Share Capital

28 (IAS 1)The Statement of changes in equity must show:  Total comprehensive income  Changes in accounting policy  Correcting prior period errors  Share issues, payment of dividends

29 In group prepare notes to brief class on given topic 1. Accounting standards 2. Duties and responsibilities of directors 3. Objective and users of financial reporting 4. Useful financial information 5. Elements of financial statements


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