Stakeholders

Thanks to Michelle for this contribution ...

https://drive.google.com/a/macrob.vic.edu.au/?usp=gmail#folders/0B3lBZTLHkqJsMWl2WklTWEFVOWs

Christine Lagarde ...

Christine Lagarde ... President of the International Monetary Fund (IMF).  This is one of the most important roles in international finance.  An impressive person who was once a high school student just like you!

Read her Bio.

https://www.imf.org/external/np/omd/bios/cl.htm

The last supper ...

I was going to put this question on SAC1 but decided against it.  Have a go at it!

Question 4.
Refer to the following image and explain the link between it and double entry accounting.

(2 marks)

SAC on Tuesday

Our first SAC is next Tuesday.  Up to and including 4.1.  Think of this as a positive experience to demonstrate the work you have done.  

Accounting Principles ...

CHER at the MCG

This is just a way to remember the 7 Accounting Principles!

These principles are the foundation of the accounting system and work to ensure that the records and reports of different businesses are produced using the same rules.

Consistency.  Example:  use the same format/design of the reports from reporting period to reporting period to help stakeholders compare performance overtime.  Example:  use the same depreciation method for a particular non current asset over its useful life.

Historical Cost.  Example:  record and report transactions at their original cost which can be verified by documentarly evidence.  This ensures the reports are reliable.  Exception is agreed value when the owner contributes assets to the business.

Entity.  Stakeholders are only interested in transactions that relate to the business entity and not transactions of other entities such as the owner.  Data about other entities is not relevant.

Reporting Period.  The period of time over which profit is calculated.  It cuts across the indefinite life of the business due to the going concern principle.  The reporting period is identified on the top of the Cash Flow Statement and Income Statement.  The Balance Sheet is prepared at the end of the reporting period.

Monetary Unit.  All transactions must be expressed in Australian Dollars.  

Conservatism.  More about this in Unit 4 but a good way to sum it up is .... "do not provide stakeholders with overly optimistic information".  In particular, do not overstate revenue, profit and assets.  A good example is a telephone call to the business to enquire about the price of stock or if the busienss received an order from a customer.  Would the business record and report this at this point in time?  No, there is no certainty.  If you did count that as revenue, revenue, profit and assets (cash or debtors) would be overstated which is contrary to conservatism.  The revenue is only counted at the point of sale, when the stock is exchanged and invoice/receipt created.  Other examples later in the course.

Going Concern Principle.  Assumes the life of the business goes on forever, that is, beyond the current reporting period.  The best key word is "future", that is, the business has a future life beyond the current reporting period.  Assets, for example, represent future benefits beyond the end of the current reporting period and liabilities for example, represent current obligations that will lead to a future outflow of economic resources.

Janet Yellen ... have you heard of her?

Janet Yellen is one of the most powerful people on the planet.  She is head of the Federal Reserve in America.  This means she has had a most successful career in Commerce/Law.  Some of you should aspire to this sort of position in the future.  Yes you can!

Read a short bio of her below:


http://www.biography.com/people/janet-yellen-21362135

Accounting process (again)

Thanks to Shiva for this Prezi!

https://prezi.com/mbdfv4y5ijf4/the-accounting-system-pre-double-entry/

Accounting Process ...

Thanks Ramya for this Prezi on the accounting process ...

http://prezi.com/mbdfv4y5ijf4/edit/?auth_key=l9l82m1&follow=63wrckwsokad#4_95982358

STOCK CARDS

Hey! Here's a short video we made about Stock Cards, enjoy!

https://www.powtoon.com/show/fUx2O2lsOXQ/stock-cards/

Natasha S. & Sanduni BL :)

Cash Flow Statements ...

Thanks to Megan for this contribution ...

https://mail.google.com/mail/ca/u/0/?pli=1#inbox/14bb9b633d2d9384?projector=1

Equities Summary

Finished Chapter 4.1 ?????????

Please do Quia Quiz on Double Entry!!!!

Qualitative Characteristics

The 4 qualitative characteristics, reliability, relevance, comparability and understandability relate to the reports.  Just the reports. Not the records.  Just the reports (just to repeat myself).

The QC are the target attributes of the reports, that is, the attributes that stakeholders want in the reports to make them more useful.

Understandability

kalkdl kkg kkd jwukj abaazpei kkdj uy ddo. hu qwe kdiid k;;.

Did you understand that first sentence?  Nonsense!

Information that is not understandable serves no useful purpose.  If accounting reports are not understandable to stakeholders, they are useless.

What can make the reports (CFS, IS, BS) less understandable? 

• Poor presentation/design of reports.
• Poor use of Monetary Unit (some items are not expressed in $A).
• Reporting period is not shown or unclear.
• Written in a language other than English.
• Over use of technical/complex language.
• etc.

So, one of the target attributes of the reports is understandability.  (yes, that is a word in VCE Accounting).
Stakeholders want reports that are 'understandable'.

Comparability ...

The 3rd shape is different to the first 2 shapes ... that is hard to compare, it is not comparable!  Stakeholders do not want unexpected changes (blue not black).  They want reports that are predictable in their presentation/format/design. If that occurs, it is much easier to compare performance data overtime.  Predicable look/feel/design/language overtime makes it soooooo much easier to compare changes to the data within that look/feel/design/language.  Stakeholders want predicatability in look/feel/design/language overtime.  Predictability sounds boring ... but stakeholders like predictability!

Relevance ...

I am waiting for my wife to bring home "red curry chicken" ... (special).  Whilst I am waiting ...




Relevance ... one of the qualitative charateristics of the reports.

What do you mean by "qualitative characteristics of the reports Sir?"

Target attributes.  Target attributes.  ???  The qualities we want from the reports (not records).

Relevance has 4 dimensions (sounds impressive! ... these are on the back of K202)

1.  Business entity:  the data must be relevant to the business (not the owner as an individual).
2.  Reporting period:  the data must be relevant to the period of time, reporting period, under consideration.
3.  Scale/size.  Is the scale/size/value/dimension of the data significant?  If so, report it ... because the stakeholders will need that to evaluate the performance of the business.  If not, exclude it ... best example is to exclude cents from the reports ... that will not impact on the decision making by the stakeholders.
4.  Timeliness.   Do the stakeholders get the data in a 'timely' manner?  There is no definition of 'timely'.  Are the reports (1, 2, 3) made available to the stakeholders soon enough so that they can use the information to make an assessment of the performance of the business?

Reliability ...

Reliability

When I think of RELIABILITY, I think of 2 things:

1.  Documents/proof/verification /Shirlock Holmes/your attendance 

2.  No material errors (double entry works to enhance reliability)
... PS:  "material" means significant ... thus when the reports are reliable, they do not contain significant errors. (Luca did not want errors, hence double entry and Trial Balance)

Have a good weekend and ...

Blue Class

The Blue Class of 2015.  Could do with more light!  Perhaps we will take another photo.  Anyway, this photo was taken on Friday 20th February, period 1.  23 students from a total of 73 on the Accounting 3/4 journey together in 2015.  They have certainly made an impressive start and they will be debiting and crediting with the best of them very soon!

Documents

Documents by Charmaine Chin

Documents: Accounting documents record individual business transactions. Documents are usually retained to verify transactions. This means that the information later recorded can be traced to these original transactions, thus meaning the information in the accounting reports can be called reliable. Stakeholders want this information to be reliable so that they can make better decisions! Documents usually contain the number and description of the business transaction, date, amount and source.

Examples of documents are bank statements (which are recorded into the Cash Payments Journal), receipts(CRJ), cheques(CPJ), internet transfers(CRJ/CPJ), credit purchases invoices(PJ), credit sales invoices(SJ) and memos(GJ).

Accounting principles and qualitative characteristics ...

Students learning independently on Chapter 3. That's Minori, Alicia and Sarah.

Aliens in Accounting

For reasons I do not understand, we had some aliens in Accounting, Thursday, period 4.

Red Class

This photo was taken on the 12th February, period 1, around the Boardroom Table.  Some of these students will end up as CEOs and command their own Boardroom Table in the future.  That accounting stuff will come back to them in some way.  Before this photo was taken, we had just done Nano 3 together which is difficult for new students.  Remember?  Lots of potential in this group.  Will they still be smiling in November?  Of course they will.

Yellow Class

This photo was taken on the 10th February, 2015.  The Yellow Class.   How will the year unfold for these students?  When they reflect on their year in November, what will they think?  Will they be satisfied with our journey together?  Will they have any regrets?

One thing I have learned over the years is that success does not come knocking ... you have to seek it out.  You have to be an active learner and take responsibility for your own learning.  Nothing will happen unless you make it happen.  In the end, it is your responsibility.  I am optimistic that we can have a happy successful year together; that is my objective.

Liabilities

Hi guys! We made an animated video about liabilities. Hope you get to understand a bit more about liabilities through it ^^

- Teresa Chan (12B) and Ashleigh Noto (12F)
Message from Mr Page ... "click on that video link above ... it is excellent!!!

Accounting Records

Hi girls!

So Mr. Page asked me to pick a slip of paper which had the topic of my article and yes he was picking on the "old" students. :P 

Nevertheless, I took on this task and did a summary of accounting records. It's good for new students who are still learning these new concepts and also a great reminder for the "old" students. 

It's uploaded on Google drive as I couldn't upload a publisher file on here, hopefully you guys can see/download it. Tell me if you can't!

Enjoy!!

Amanda Chau 12F
12ACC01

Cadetships

Some students have asked me to clarify Cadetships.  This is when an Accounting business recruits a year 12 (not 11) student and agrees to support them through their university degree. Some specify that the degree be at Melbourne or RMIT so the student is close to the city for work as well as study. The student works part time at that business along the way and is, of course, paid for that work. When the student graduates they also have lots of valuable work experience and, as such, command more money as an employee.  There are lots of variations with Cadetships so if you are interested, you ask each organisation for details at, for example, "Meet the Business Leaders" meetings etc.  Also, most years, some of these organisation come to MacRob and give lunchtime info sessions.  Ms Serpless will advertise these. If you are really keen, I would certainly contact Ms Serpless to ensure you get any info.  The cadetship process is, of course, highly competitive for good reason but MacRobians have had lots of success over the years ... it could include you.  Check out this link ...

http://www.charteredaccountants.com.au/Students/High-school.aspx

This is Kim Fung from the Class of 2014.  Why is she smiling?  She had just been told she was successful in her Cadetship application.

Why is Ravali smiling? (she is on the left)

She had just received news that two separate Accounting businesses wanted her as an Accounting Cadet in 2014.  Yes two!  She ended up getting a 50 for Accounting and ... she is now doing Medicine at Monash.   True story.

Accounting Unit 3/4 Balance Sheet

BALANCE SHEET

By Himasha Panagoda 11E, Saumyaa Balakanthan 11E & Charindya Janakantha 11J

→ General info:

• The Balance Sheet is one of the major accounting reports.
• It is prepared for stakeholders. Stakeholders are individuals or businesses that are interested in the performance of the business (e.g. the owner, manager, potential owners, people/businesses who are owed money by the business, employees, Australian Taxation Office (ATO) etc.)
• A new Balance sheet is prepared at the end of each reporting period. The reporting period is the period over which profit is calculated. The last day of the period is called Balance Day and the balance sheet is prepared on this day.
• It shows the assets and equities at that point of time. Assets are resources under the control of the business, as a result of past events, that will provide future economic benefits. Equities refers to who has an interest or ownership in the assets (Under the equities heading, liabilities and owner’s equity are included in the column of the BS).
• The most important rule:  ASSETS = EQUITIES

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Example of an unclassified balance sheet:

*The owner of Clean Cut Mowers is Bob.

Clean Cut Mowers Balance Sheet at 30/6/15

Assets                                                      $	Equities                                                    $
Bank                                                    50000	Liabilities
Stock control                                       15000	Loan                                                  10000
Office assets                                       25000	GST owing                                            5000
Premises                                             90000	Total liabilities                                    15000
Vehicle                                                 31000
	Owner’s equity
	Capital, Bob                                       100000
	Add net profit                                       13000
	Less drawings                                      7000
Total assets                                      211000	Total equities                                   211000

→ Title:

• State the name of the business
• State what type of report it is. In this case “Balance Sheet”
• State the specific date of the end of the reporting period (e.g. … at 31/12/15)

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→ Asset column:

• Title the column. In this case “ASSETS” towards the left hand side and a dollar sign towards the right hand side)
• On the left hand side, list the type of asset (e.g. bank, stock control, vehicle, etc.)
• On the right hand side, list of monetary value of each asset (e.g 50000). ***Avoid using a comma in the number and do not place a dollar sign in front.  Avoid doing this → $50,000
• Bank- get the value of the bank/cash from the final value (cash at end) in the Cash Flow Statement.
• Stock control- a simple way to find the value of stock control is by using the last value in the balance column of the stock card. However, if the stock card is not given there is a way to calculate stock control:

Stock Control on Balance Day = Stock control from previous balance sheet  +  stock that has been purchased (the total/ final value in the Stock column of the Cash Payments Journal)  ー  stock that has been sold (the total/final value in the Cost of Sales column in the Cash Receipts Journal) + stock that has been put into the business due to capital contribution ー stock that has been taken by the owner (A.K.A drawings of stock) . Remember not to deduct drawings of cash because this the Stock control.

• Office Assets - office assets from previous balance sheet + office assets that have been purchased + office assets that have been put into the business due to capital contribution  ー office assets that have been taken by the owner
• Premises- *for the time being, this value usually stays constant
• Vehicle - *for the time being, this value doesn’t normally change over reporting periods.  

*Later on in the unit, you will be introduced the concept of depreciation which will have an affect on assets such as premises, vehicle and office assets.

• GST owing: When the ATO owes the business money. It mean the GST paid exceeds the GST received. This does not happen too often.

• Total assets- Add together all of the values from the assets column.

Clean Cut Mowers Balance Sheet at 30/6/15

Assets                                                      $	Equities                                                    $
Bank                                                    50000	Liabilities
Stock control                                       15000	Loan                                                    10000
Office assets                                       25000	GST owing                                            5000
Premises                                             90000	Total liabilities                                    15000
Vehicle                                                 31000
	Owner’s equity
	Capital, Bob                                       100000
	Add net profit                                       13000
	Less drawings                                      7000
Total assets                                      211000	Total equities                                   211000

---

→ Equities column:

• Title the column. In this case “EQUITIES” towards the left hand side and a dollar sign towards the right hand side)
• On the left hand side, list the type of equity (e.g. bank overdraft, loan, GST owing, etc.)
• On the right hand side, list of monetary value of each equity (e.g 10000). ***Avoid using a comma in the number and do not place a dollar sign in front.  Avoid doing this → $10,000
• In the equities column there are two subsections: Liabilities and Owner’s Equity. Liabilities includes such things as loan or GST owing. Owner’s equity will only include the Capital (Capital, owner’s name). In the example above, “add net profit” and “less drawings” is only there to assist you with calculating the new Capital. Later on, these two titles will/might not be included in the balance sheet.

Clean Cut Mowers Balance Sheet at 30/6/15

Assets                                                      $	Equities                                         $
Bank                                                    50000	Liabilities
Stock control                                       15000	Loan                                     10000
Office assets                                       25000	GST owing                             5000
Premises                                             90000	Total liabilities                    15000
Vehicle                                                31000
	Owner’s equity
	Capital, Bob                   100000
	Add net profit                         13000
	Less drawings                       7000
Total assets                                       211000	Total equities                    211000

• LIABILITIES:
• Bank overdraft- get the value of the bank/cash from the final value (cash at end) in the Cash Flow Statement.
• Loan: money the business has borrowed and is a future obligation. If the loan is one that has been present since the last reporting period, the previous loan value will be on the previous balance sheet. Add any new loans received and subtract any loan repayments that occurred during the reporting period.
• GST owing: When the business owes the ATO GST. The GST received exceeds the GST paid. To easily calculate the GST, use a GST schedule:

*GST at start of period is from the previous balance sheet:

GST schedule at 30/6/15
	$
GST at start of period	3000
+ GST collections	17000
+ATO refunds for GST	-
Subtotal	20000
ーGST payments	8000
ーATO payments	7000
GST at end of period	5000

Total Liabilities- Add together all of the values from the liabilities sections.

• EQUITIES:
• Owner’s equity or also called Capital- this is owner’s claim on the assets. Each reporting period the capital will change if there are any transactions such as expenses or revenue. To work out the new capital:

Capital from previous balance sheet   +net profit OR ーnet loss    + any capital contributions   ー any drawings

*Net profit/Net loss can be found by looking at the last value in the Income Statement.

Total Equities- Add together the value from total liabilities and the new capital value.

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• REMEMBER:

The total assets and total equities should always BALANCE each other out.

TOTAL ASSETS = EQUITIES

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