Notes.docx

WHAT IS A BUSINESS Business is an entity that provide goods or service    

Investors/Lenders Customers Government Suppliers

Profit Making

Need a unified language

Needs of internal user is different from external – sometimes need it faster than external uses  Internal users: employers Accounting principle are roughly similar Financial accounting is for external users i.e. stakeholders Financial statement is able to fill in 80% of your info need

From google

IASB (?)  The International Accounting Standards Board (IASB) is an independent, private-sector body that develops and approves International Financial Reporting Standards (IFRSs). The IASB operates under the oversight of the IFRS Foundation.  The basic purpose of the IASB Framework is to provide assistance and guidance to the IASB in developing new or revised standards in addition to assisting the preparers of financial statements in applying the standards and dealing with issues which are not explicitly dealt with by the standards

Singapore adopts IFRS Frameworks  let u know why create certain rules 4 qualities acct info must have:  Understandability  Relevance o Materiality: if u omit this it will affect decision  Reliability o Faithful representation: financial statement should be able to tell u true info o Substance over Form: o Neutrality: financial statement must not favour one over another o Prudence: when u prep financial statement u sometimes need to estimate certain things  cater a little bit more to wats the min requirement o Completeness: Have as much info as possible  Comparability o There are times when act policy changes  if that’s the case, we will ask the company to restate their financial statement  allow u to compare across time and peers

When u prep financial statement, there’s 2 standards  Going concern  Accrual Basis: adopted the assumption – when to u acct for the Balance sheet:  Current (assets) - things that are always changing in the next 12 months  Shareholder equity: when the company first establish there’s 0 retained earnings but soon after the first year the profits will go into the retained earnings and so on if u never take out  Non-current assets : i.e property Income Statement:  associated expenses Cash Flow statement:  Tells you how much money in the bank account 

Assets = Liabilities + Shareholders equity Difference between lender and shareholders – slide page 27  If lenders give money u have to give interest but don’t need for shareholders Slide page29: assuming company earns 3000, 1000 will defo go to lenders. Shareholders will get back the 1000 and the 950  so if the company earns 1950 instead, the lender will still get back 1050(inclusive of the 5% interest) but company will only get back the remaining For grab & uber their gross profit is a lot but their net profit will be lesser cuz of advertising cost & etc Page 34: 300; 90; 210 Page 35:  What is the revenue: 50x30=1500  What is the COGS: 30x30=900  What is the Gross Profit: 1500-900=600 Net profit in income statement goes into retained earnings in balance sheet Revenue is not the same as cash cos revenue is just an idea but cash is the actual number you see in your bank Page 38 *****

Banks have the first right to your cash flow

 i.e. SIA dun gives a lot of dividends so in years where they make losses, their retained earnings is actually q high (the day where they give out dividends the share price might drop a little)

statement of changes in Equity  page 41* o PPE: Property, plant and equipment (PP&E) is a company asset that is vital to business operations but cannot be easily liquidated, and depending on the nature of a company's business, the total value of PP&E can range from very low to extremely high compared to total assets.  Page 45** Date of income statement covers a period of time Potential investor would most likely use income statement to evaluate a company’s financial performance for the current period

WHAT HAVE YOU LEARNT FROM TODAYS LESSON    

Fixed Assets = PPE Dividends are paid from retained earngs How the financisl statement are linked Lenders will get back what they lent out to comapny + interest but to shareholders it depends on the net proft

Income Statement Revenue

Expenses

Operating:  Sales (or Turnover or Revenue)

Operating:  Cost of Sales (COGS)  Other operating expenses

Non-Operating:  Other income  Interest income  Gain on disposal of PPE  Exceptional gains

Non-Operating:  Interest expenses  Loss on disposal of PPE  Exceptional Losses



Is the final amount calculated in the statement of cash flows = cash in assets for balance sheet or will it be different due to things like fines incurred? o The final amount calculated un statement of cashflows MUST be equivalent to the cash amount you see in Balance sheet because it must explain all flows of cash within the business. o a fine will fall under Cash Flow from Operation

WHAT IS A TRANSACTION

Purchases are one kind of transaction; Paying salaries; taking a loan; purchase fixed assets from supplier; issue dividends to investors, sales of assets to third party  an employee stole $1000 from the cash register last month: considered as transaction because there is monetary impact unless then money was recover   

Accounts payable is money owed by a business to its suppliers shown as a liability on a company's balance sheet. It is distinct from notes payableliabilities, which are debts created by formal legal instrument documents. Notes Payable is a general ledger account in which a company records the face amounts of the promissory notes that it has issued. The amounts for the promissory notes (or simply notes) that have not been repaid are reported as part of the company's liabilities. Accrued liabilities are liabilities that reflect expenses on the income statement that have not been paid or logged under accounts payable during an accounting period; in other words, obligations for goods and services provided to a company for which invoices have not yet been received

Account receivable decrease, cash increase Inventory is an asset account Matching Principle  Costs that ae directly attributable to the production of revenue are recignized as exenses in the same period as the related revenue o E.g. Booklink buys 100 FA books at $30 from Pearson o Only 30 were sold today. And the books were sold at $50 eaach o When o we recognize the purchase of 100 FA books o Why do you think that’s the case ?

Double entry accounting refers to the fact that every financial ransaction has at least eual & oppositie effects in at least 2 different accounts

WHAT IS A BUSINESS Business is an entity that provide goods or service    

Investors/Lenders Customers Government Suppliers

Profit Making

Need a unified language

Needs of internal user is different from external – sometimes need it faster than external uses  Internal users: employers Accounting principle are roughly similar Financial accounting is for external users i.e. stakeholders Financial statement is able to fill in 80% of your info need

From google

IASB (?)  The International Accounting Standards Board (IASB) is an independent, private-sector body that develops and approves International Financial Reporting Standards (IFRSs). The IASB operates under the oversight of the IFRS Foundation.  The basic purpose of the IASB Framework is to provide assistance and guidance to the IASB in developing new or revised standards in addition to assisting the preparers of financial statements in applying the standards and dealing with issues which are not explicitly dealt with by the standards

Singapore adopts IFRS Frameworks  let u know why create certain rules 4 qualities acct info must have:  Understandability  Relevance o Materiality: if u omit this it will affect decision  Reliability o Faithful representation: financial statement should be able to tell u true info o Substance over Form: o Neutrality: financial statement must not favour one over another o Prudence: when u prep financial statement u sometimes need to estimate certain things  cater a little bit more to wats the min requirement o Completeness: Have as much info as possible  Comparability

o

There are times when act policy changes  if that’s the case, we will ask the company to restate their financial statement  allow u to compare across time and peers

When u prep financial statement, there’s 2 standards  Going concern  Accrual Basis: adopted the assumption – when to u acct for the Balance sheet:  Current (assets) - things that are always changing in the next 12 months  Shareholder equity: when the company first establish there’s 0 retained earnings but soon after the first year the profits will go into the retained earnings and so on if u never take out  Non-current assets : i.e property Income Statement:  associated expenses Cash Flow statement:  Tells you how much money in the bank account 

Assets = Liabilities + Shareholders equity Difference between lender and shareholders – slide page 27  If lenders give money u have to give interest but don’t need for shareholders Slide page29: assuming company earns 3000, 1000 will defo go to lenders. Shareholders will get back the 1000 and the 950  so if the company earns 1950 instead, the lender will still get back 1050(inclusive of the 5% interest) but company will only get back the remaining For grab & uber their gross profit is a lot but their net profit will be lesser cuz of advertising cost & etc Page 34: 300; 90; 210 Page 35:  What is the revenue: 50x30=1500  What is the COGS: 30x30=900  What is the Gross Profit: 1500-900=600 Net profit in income statement goes into retained earnings in balance sheet Revenue is not the same as cash cos revenue is just an idea but cash is the actual number you see in your bank Page 38 *****

Banks have the first right to your cash flow  i.e. SIA dun gives a lot of dividends so in years where they make losses, their retained earnings is actually q high (the day where they give out dividends the share price might drop a little)

statement of changes in Equity  page 41* o PPE: Property, plant and equipment (PP&E) is a company asset that is vital to business operations but cannot be easily liquidated, and depending on the nature of a company's business, the total value of PP&E can range from very low to extremely high compared to total assets.  Page 45** Date of income statement covers a period of time Potential investor would most likely use income statement to evaluate a company’s financial performance for the current period

WHAT HAVE YOU LEARNT FROM TODAYS LESSON    

Fixed Assets = PPE Dividends are paid from retained earngs How the financisl statement are linked Lenders will get back what they lent out to comapny + interest but to shareholders it depends on the net proft

Income Statement Revenue

Expenses

Operating:  Sales (or Turnover or Revenue)

Operating:  Cost of Sales (COGS)  Other operating expenses

Non-Operating:  Other income  Interest income  Gain on disposal of PPE  Exceptional gains

Non-Operating:  Interest expenses  Loss on disposal of PPE  Exceptional Losses



Is the final amount calculated in the statement of cash flows = cash in assets for balance sheet or will it be different due to things like fines incurred? o The final amount calculated un statement of cashflows MUST be equivalent to the cash amount you see in Balance sheet because it must explain all flows of cash within the business. o a fine will fall under Cash Flow from Operation

WHAT IS A TRANSACTION

Purchases are one kind of transaction; Paying salaries; taking a loan; purchase fixed assets from supplier; issue dividends to investors, sales of assets to third party  an employee stole $1000 from the cash register last month: considered as transaction because there is monetary impact unless then money was recover   

Accounts payable is money owed by a business to its suppliers shown as a liability on a company's balance sheet. It is distinct from notes payableliabilities, which are debts created by formal legal instrument documents. Notes Payable is a general ledger account in which a company records the face amounts of the promissory notes that it has issued. The amounts for the promissory notes (or simply notes) that have not been repaid are reported as part of the company's liabilities. Accrued liabilities are liabilities that reflect expenses on the income statement that have not been paid or logged under accounts payable during an accounting period; in other words, obligations for goods and services provided to a company for which invoices have not yet been received

Account receivable decrease, cash increase Inventory is an asset account Matching Principle  Costs that ae directly attributable to the production of revenue are recignized as exenses in the same period as the related revenue o E.g. Booklink buys 100 FA books at $30 from Pearson o Only 30 were sold today. And the books were sold at $50 eaach o When o we recognize the purchase of 100 FA books o Why do you think that’s the case ?

Double entry accounting refers to the fact that every financial ransaction has at least eual & oppositie effects in at least 2 different accounts

WHAT IS A BUSINESS Business is an entity that provide goods or service    

Investors/Lenders Customers Government Suppliers

Profit Making

Need a unified language

Needs of internal user is different from external – sometimes need it faster than external uses  Internal users: employers Accounting principle are roughly similar Financial accounting is for external users i.e. stakeholders Financial statement is able to fill in 80% of your info need

From google

IASB (?)  The International Accounting Standards Board (IASB) is an independent, private-sector body that develops and approves International Financial Reporting Standards (IFRSs). The IASB operates under the oversight of the IFRS Foundation.  The basic purpose of the IASB Framework is to provide assistance and guidance to the IASB in developing new or revised standards in addition to assisting the preparers of financial statements in applying the standards and dealing with issues which are not explicitly dealt with by the standards

Singapore adopts IFRS Frameworks  let u know why create certain rules 4 qualities acct info must have:  Understandability  Relevance o Materiality: if u omit this it will affect decision  Reliability o Faithful representation: financial statement should be able to tell u true info o Substance over Form: o Neutrality: financial statement must not favour one over another o Prudence: when u prep financial statement u sometimes need to estimate certain things  cater a little bit more to wats the min requirement o Completeness: Have as much info as possible

 Comparability o There are times when act policy changes  if that’s the case, we will ask the company to restate their financial statement  allow u to compare across time and peers When u prep financial statement, there’s 2 standards  Going concern  Accrual Basis: adopted the assumption – when to u acct for the Balance sheet:  Current (assets) - things that are always changing in the next 12 months  Shareholder equity: when the company first establish there’s 0 retained earnings but soon after the first year the profits will go into the retained earnings and so on if u never take out  Non-current assets : i.e property Income Statement:  associated expenses Cash Flow statement:  Tells you how much money in the bank account 

Assets = Liabilities + Shareholders equity Difference between lender and shareholders – slide page 27  If lenders give money u have to give interest but don’t need for shareholders Slide page29: assuming company earns 3000, 1000 will defo go to lenders. Shareholders will get back the 1000 and the 950  so if the company earns 1950 instead, the lender will still get back 1050(inclusive of the 5% interest) but company will only get back the remaining For grab & uber their gross profit is a lot but their net profit will be lesser cuz of advertising cost & etc Page 34: 300; 90; 210 Page 35:  What is the revenue: 50x30=1500  What is the COGS: 30x30=900  What is the Gross Profit: 1500-900=600 Net profit in income statement goes into retained earnings in balance sheet Revenue is not the same as cash cos revenue is just an idea but cash is the actual number you see in your bank Page 38 *****

Banks have the first right to your cash flow  i.e. SIA dun gives a lot of dividends so in years where they make losses, their retained earnings is actually q high (the day where they give out dividends the share price might drop a little)

statement of changes in Equity  page 41* o PPE: Property, plant and equipment (PP&E) is a company asset that is vital to business operations but cannot be easily liquidated, and depending on the nature of a company's business, the total value of PP&E can range from very low to extremely high compared to total assets.  Page 45** Date of income statement covers a period of time Potential investor would most likely use income statement to evaluate a company’s financial performance for the current period

WHAT HAVE YOU LEARNT FROM TODAYS LESSON    

Fixed Assets = PPE Dividends are paid from retained earngs How the financisl statement are linked Lenders will get back what they lent out to comapny + interest but to shareholders it depends on the net proft

Income Statement Revenue

Expenses

Operating:  Sales (or Turnover or Revenue)

Operating:  Cost of Sales (COGS)  Other operating expenses

Non-Operating:  Other income  Interest income  Gain on disposal of PPE  Exceptional gains

Non-Operating:  Interest expenses  Loss on disposal of PPE  Exceptional Losses



Is the final amount calculated in the statement of cash flows = cash in assets for balance sheet or will it be different due to things like fines incurred? o The final amount calculated un statement of cashflows MUST be equivalent to the cash amount you see in Balance sheet because it must explain all flows of cash within the business. o a fine will fall under Cash Flow from Operation

WHAT IS A TRANSACTION

Purchases are one kind of transaction; Paying salaries; taking a loan; purchase fixed assets from supplier; issue dividends to investors, sales of assets to third party  an employee stole $1000 from the cash register last month: considered as transaction because there is monetary impact unless then money was recover   

Accounts payable is money owed by a business to its suppliers shown as a liability on a company's balance sheet. It is distinct from notes payableliabilities, which are debts created by formal legal instrument documents. Notes Payable is a general ledger account in which a company records the face amounts of the promissory notes that it has issued. The amounts for the promissory notes (or simply notes) that have not been repaid are reported as part of the company's liabilities. Accrued liabilities are liabilities that reflect expenses on the income statement that have not been paid or logged under accounts payable during an accounting period; in other words, obligations for goods and services provided to a company for which invoices have not yet been received

Account receivable decrease, cash increase Inventory is an asset account Matching Principle  Costs that ae directly attributable to the production of revenue are recignized as exenses in the same period as the related revenue o E.g. Booklink buys 100 FA books at $30 from Pearson o Only 30 were sold today. And the books were sold at $50 eaach o When o we recognize the purchase of 100 FA books o Why do you think that’s the case ?

Double entry accounting refers to the fact that every financial ransaction has at least eual & oppositie effects in at least 2 different accounts

WHAT IS A BUSINESS Business is an entity that provide goods or service    

Investors/Lenders Customers Government Suppliers

Profit Making

Need a unified language

Needs of internal user is different from external – sometimes need it faster than external uses  Internal users: employers Accounting principle are roughly similar Financial accounting is for external users i.e. stakeholders Financial statement is able to fill in 80% of your info need

From google

IASB (?)  The International Accounting Standards Board (IASB) is an independent, private-sector body that develops and approves International Financial Reporting Standards (IFRSs). The IASB operates under the oversight of the IFRS Foundation.  The basic purpose of the IASB Framework is to provide assistance and guidance to the IASB in developing new or revised standards in addition to assisting the preparers of financial statements in applying the standards and dealing with issues which are not explicitly dealt with by the standards

Singapore adopts IFRS Frameworks  let u know why create certain rules 4 qualities acct info must have:  Understandability  Relevance o Materiality: if u omit this it will affect decision  Reliability o Faithful representation: financial statement should be able to tell u true info o Substance over Form: o Neutrality: financial statement must not favour one over another o Prudence: when u prep financial statement u sometimes need to estimate certain things  cater a little bit more to wats the min requirement o Completeness: Have as much info as possible

 Comparability o There are times when act policy changes  if that’s the case, we will ask the company to restate their financial statement  allow u to compare across time and peers When u prep financial statement, there’s 2 standards  Going concern  Accrual Basis: adopted the assumption – when to u acct for the Balance sheet:  Current (assets) - things that are always changing in the next 12 months  Shareholder equity: when the company first establish there’s 0 retained earnings but soon after the first year the profits will go into the retained earnings and so on if u never take out  Non-current assets : i.e property Income Statement:  associated expenses Cash Flow statement:  Tells you how much money in the bank account 

Assets = Liabilities + Shareholders equity Difference between lender and shareholders – slide page 27  If lenders give money u have to give interest but don’t need for shareholders Slide page29: assuming company earns 3000, 1000 will defo go to lenders. Shareholders will get back the 1000 and the 950  so if the company earns 1950 instead, the lender will still get back 1050(inclusive of the 5% interest) but company will only get back the remaining For grab & uber their gross profit is a lot but their net profit will be lesser cuz of advertising cost & etc Page 34: 300; 90; 210 Page 35:  What is the revenue: 50x30=1500  What is the COGS: 30x30=900  What is the Gross Profit: 1500-900=600 Net profit in income statement goes into retained earnings in balance sheet Revenue is not the same as cash cos revenue is just an idea but cash is the actual number you see in your bank Page 38 *****

Banks have the first right to your cash flow  i.e. SIA dun gives a lot of dividends so in years where they make losses, their retained earnings is actually q high (the day where they give out dividends the share price might drop a little)

statement of changes in Equity  page 41* o PPE: Property, plant and equipment (PP&E) is a company asset that is vital to business operations but cannot be easily liquidated, and depending on the nature of a company's business, the total value of PP&E can range from very low to extremely high compared to total assets.  Page 45** Date of income statement covers a period of time Potential investor would most likely use income statement to evaluate a company’s financial performance for the current period

WHAT HAVE YOU LEARNT FROM TODAYS LESSON    

Fixed Assets = PPE Dividends are paid from retained earngs How the financisl statement are linked Lenders will get back what they lent out to comapny + interest but to shareholders it depends on the net proft

Income Statement Revenue

Expenses

Operating:  Sales (or Turnover or Revenue)

Operating:  Cost of Sales (COGS)  Other operating expenses

Non-Operating:  Other income  Interest income  Gain on disposal of PPE  Exceptional gains

Non-Operating:  Interest expenses  Loss on disposal of PPE  Exceptional Losses



Is the final amount calculated in the statement of cash flows = cash in assets for balance sheet or will it be different due to things like fines incurred? o The final amount calculated un statement of cashflows MUST be equivalent to the cash amount you see in Balance sheet because it must explain all flows of cash within the business. o a fine will fall under Cash Flow from Operation

WHAT IS A TRANSACTION

Purchases are one kind of transaction; Paying salaries; taking a loan; purchase fixed assets from supplier; issue dividends to investors, sales of assets to third party  an employee stole $1000 from the cash register last month: considered as transaction because there is monetary impact unless then money was recover   

Accounts payable is money owed by a business to its suppliers shown as a liability on a company's balance sheet. It is distinct from notes payableliabilities, which are debts created by formal legal instrument documents. Notes Payable is a general ledger account in which a company records the face amounts of the promissory notes that it has issued. The amounts for the promissory notes (or simply notes) that have not been repaid are reported as part of the company's liabilities. Accrued liabilities are liabilities that reflect expenses on the income statement that have not been paid or logged under accounts payable during an accounting period; in other words, obligations for goods and services provided to a company for which invoices have not yet been received

Account receivable decrease, cash increase Inventory is an asset account Matching Principle  Costs that ae directly attributable to the production of revenue are recignized as exenses in the same period as the related revenue o E.g. Booklink buys 100 FA books at $30 from Pearson o Only 30 were sold today. And the books were sold at $50 eaach o When o we recognize the purchase of 100 FA books o Why do you think that’s the case ?

Double entry accounting refers to the fact that every financial ransaction has at least eual & oppositie effects in at least 2 different accounts

WHAT IS A BUSINESS Business is an entity that provide goods or service    

Investors/Lenders Customers Government Suppliers

Profit Making

Need a unified language

Needs of internal user is different from external – sometimes need it faster than external uses  Internal users: employers Accounting principle are roughly similar Financial accounting is for external users i.e. stakeholders Financial statement is able to fill in 80% of your info need

From google

IASB (?)  The International Accounting Standards Board (IASB) is an independent, private-sector body that develops and approves International Financial Reporting Standards (IFRSs). The IASB operates under the oversight of the IFRS Foundation.  The basic purpose of the IASB Framework is to provide assistance and guidance to the IASB in developing new or revised standards in addition to assisting the preparers of financial statements in applying the standards and dealing with issues which are not explicitly dealt with by the standards

Singapore adopts IFRS Frameworks  let u know why create certain rules 4 qualities acct info must have:  Understandability  Relevance o Materiality: if u omit this it will affect decision  Reliability o Faithful representation: financial statement should be able to tell u true info o Substance over Form: o Neutrality: financial statement must not favour one over another o Prudence: when u prep financial statement u sometimes need to estimate certain things  cater a little bit more to wats the min requirement o Completeness: Have as much info as possible

 Comparability o There are times when act policy changes  if that’s the case, we will ask the company to restate their financial statement  allow u to compare across time and peers When u prep financial statement, there’s 2 standards  Going concern  Accrual Basis: adopted the assumption – when to u acct for the Balance sheet:  Current (assets) - things that are always changing in the next 12 months  Shareholder equity: when the company first establish there’s 0 retained earnings but soon after the first year the profits will go into the retained earnings and so on if u never take out  Non-current assets : i.e property Income Statement:  associated expenses Cash Flow statement:  Tells you how much money in the bank account 

Assets = Liabilities + Shareholders equity Difference between lender and shareholders – slide page 27  If lenders give money u have to give interest but don’t need for shareholders Slide page29: assuming company earns 3000, 1000 will defo go to lenders. Shareholders will get back the 1000 and the 950  so if the company earns 1950 instead, the lender will still get back 1050(inclusive of the 5% interest) but company will only get back the remaining For grab & uber their gross profit is a lot but their net profit will be lesser cuz of advertising cost & etc Page 34: 300; 90; 210 Page 35:  What is the revenue: 50x30=1500  What is the COGS: 30x30=900  What is the Gross Profit: 1500-900=600 Net profit in income statement goes into retained earnings in balance sheet Revenue is not the same as cash cos revenue is just an idea but cash is the actual number you see in your bank Page 38 *****

Banks have the first right to your cash flow  i.e. SIA dun gives a lot of dividends so in years where they make losses, their retained earnings is actually q high (the day where they give out dividends the share price might drop a little)

statement of changes in Equity  page 41* o PPE: Property, plant and equipment (PP&E) is a company asset that is vital to business operations but cannot be easily liquidated, and depending on the nature of a company's business, the total value of PP&E can range from very low to extremely high compared to total assets.  Page 45** Date of income statement covers a period of time Potential investor would most likely use income statement to evaluate a company’s financial performance for the current period

WHAT HAVE YOU LEARNT FROM TODAYS LESSON    

Fixed Assets = PPE Dividends are paid from retained earngs How the financisl statement are linked Lenders will get back what they lent out to comapny + interest but to shareholders it depends on the net proft

Income Statement Revenue

Expenses

Operating:  Sales (or Turnover or Revenue)

Operating:  Cost of Sales (COGS)  Other operating expenses

Non-Operating:  Other income  Interest income  Gain on disposal of PPE  Exceptional gains

Non-Operating:  Interest expenses  Loss on disposal of PPE  Exceptional Losses



Is the final amount calculated in the statement of cash flows = cash in assets for balance sheet or will it be different due to things like fines incurred? o The final amount calculated un statement of cashflows MUST be equivalent to the cash amount you see in Balance sheet because it must explain all flows of cash within the business. o a fine will fall under Cash Flow from Operation

WHAT IS A TRANSACTION

Purchases are one kind of transaction; Paying salaries; taking a loan; purchase fixed assets from supplier; issue dividends to investors, sales of assets to third party  an employee stole $1000 from the cash register last month: considered as transaction because there is monetary impact unless then money was recover   

Accounts payable is money owed by a business to its suppliers shown as a liability on a company's balance sheet. It is distinct from notes payableliabilities, which are debts created by formal legal instrument documents. Notes Payable is a general ledger account in which a company records the face amounts of the promissory notes that it has issued. The amounts for the promissory notes (or simply notes) that have not been repaid are reported as part of the company's liabilities. Accrued liabilities are liabilities that reflect expenses on the income statement that have not been paid or logged under accounts payable during an accounting period; in other words, obligations for goods and services provided to a company for which invoices have not yet been received

Account receivable decrease, cash increase Inventory is an asset account Matching Principle  Costs that ae directly attributable to the production of revenue are recignized as exenses in the same period as the related revenue o E.g. Booklink buys 100 FA books at $30 from Pearson o Only 30 were sold today. And the books were sold at $50 eaach o When o we recognize the purchase of 100 FA books o Why do you think that’s the case ?

Double entry accounting refers to the fact that every financial ransaction has at least eual & oppositie effects in at least 2 different accounts