- Term Papers, Book Reports, Research Papers and College Essays

Accounting Mba

Essay by   •  November 18, 2016  •  Course Note  •  3,222 Words (13 Pages)  •  525 Views

Essay Preview: Accounting Mba

Report this essay
Page 1 of 13

[pic 1]

Financial accounting:

Define Accounting: accounting system collects financial information for an organization and report that information for decision makers.

The accounting equation:

Assets                =        Liabilities                +        Shareholders Equity[pic 2][pic 3][pic 4][pic 5]

[pic 6][pic 7]

[pic 8]

This equation for all kinds of companies servicing, merchandising & manufacturing

Briefly distinguish financial accounting from managerial accounting:

Financial accounting

Managerial accounting

Time frame

Periodic financial statements and related disclosures.

Monthly or Quarterly Or Annually  

Detailed plans and continued performance reports


External users

Internal users

Example for users

Creditors, investors, suppliers & customers.



What are the expectations of the investors when they acquire shares?

Investors                        Shareholders [pic 9]

Current                                                        Potential

  • Dividends to be received                        -        Part of profit distributed to shareholders                                                -        Share price to increase (Capital Gain)

What are the expectations of the banks when they grant a loan to a borrower?[pic 10][pic 11][pic 12]

[pic 13][pic 14][pic 15][pic 16][pic 17][pic 18]

[pic 19][pic 20][pic 21][pic 22][pic 23]

[pic 24][pic 25][pic 26]

[pic 27][pic 28][pic 29][pic 30]

Creditors                        for Example: Banks [pic 31]

  • To get the periodic interest.
  • To get principal of the loan back.  

Important Notice:

Investors & creditors are the primary users of financial accounting information.

What is the useful information provided by financial accounting?

  1. Profitability information
  2. Financial position (Assets + Liabilities + Shareholders Equity)
  3. Cash Flows

Legal form for an organization:

  1. Sole proprietorship: Single owner.
  2. Partnership: Two partners or more. 
  3. Corporation: Owned by shareholders (stockholders or stakeholders). [pic 32]

[pic 33][pic 34]

[pic 35][pic 36]

[pic 37][pic 38]


        [pic 39][pic 40]

Major types of business organization:

Service business provides services for a price.

Merchandising business buys merchandises for reselling them again.

Manufacturing business acquire raw material which are processed for finish products.

[pic 41][pic 42]

[pic 43][pic 44][pic 45][pic 46][pic 47]

[pic 48]

[pic 49][pic 50][pic 51][pic 52]

The four basic financial statements:

  1. Income statement, Operation statement or Earnings statement

Equation:        Net income = Revenue – Expenses

The non-operating revenue:

Depositing money in bank & receive interest.

  1. Interest revenue                 Non-operating Revenue[pic 53]

 Company owns building five floors, uses four floors and rented the fifth floor for 60,000 $.  

  1. Rent revenue                 Non-operating Revenue[pic 54]

Example 1:

Company X

Company Y

Money In Dollar


Money In Dollar












Shareholders' Equity





Shareholders Equity         =        Assets        -        Liabilities

[pic 55]

How do we prepare financial statements?

Financial statements are prepared using a set of accepted methods and procedures called Generally Accepted Accounting Principles (GAAP).

Example 2:

Company X Advertising during 2014

Provided services for                        1,500,000



Download as:   txt (13 Kb)   pdf (256.8 Kb)   docx (47.8 Kb)  
Continue for 12 more pages »
Only available on
Citation Generator

(2016, 11). Accounting Mba. Retrieved 11, 2016, from

"Accounting Mba" 11 2016. 2016. 11 2016 <>.

"Accounting Mba.", 11 2016. Web. 11 2016. <>.

"Accounting Mba." 11, 2016. Accessed 11, 2016.