Basic finance and accouting fundamentals and concepts
The title starting with “Finance101_xxx” relates to the financial knowledges and skills learnt during schools' accounting and finance modules, as well as other knowledges picked up during daily life
Accouting system
- Financial accouting
- Managerial accouting
- Tax
Key financial statements
- Balance sheet
- Income statement
- Cash flow statement
Singapore finance reporting system (SFRS) based on the International Financial Reporting Standards (IFRS).
The formulas:
Assets = Liabilities + Shareholders' equity)
A = L + E
i.e. refer to the following balance sheet format table, normmaly when there’s a transaction, change will happen either in both side of the balance sheet, or happen twice in 1 side (+ & -) i.e. borrow 800 result (cash +, bank loan +); buy 500 PC on account (FA +, AP +); buy 300 book (cash -, inventory -)
Balance sheet format
| Assets | Liabilities & Equity |
|---|---|
| Cash Accounts Receivable Inventory Prepaid Expenses |
Accounts Payable Accrued expenses Short-term & Current portion of debt Income taxes payable |
| Current assets Other assets |
Current liabilities Long-term debt |
| Fixed assets at cost Accumulated depreciation |
Capital stock Retained earnings |
| Net fixed assets | Shareholder’s equity |
| Total assets | Total liabilities &equity |
The balance sheet items can be remembered in the liquidity, and can be broke down as:
total asset = current asset + fixed asset + other asset
CA = cash + securites
FA = FA at cost - depreciation
OA = plant, machinery, goodwill, patents
Current Assets = Cash + Account Rec + Inventory + Prepaid exp.
Current Liabilities = Account pay. + Accrued exp. + upfront fees rec. + bank borrow + income tax payable
working capital = current assets - current liabilities
