IIMB Term1 PGP Chapter1

7/28/2019 IIMB Term1 PGP Chapter1

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Component Date WeightQuiz 1

July 13 10%

Midterm July 28, 10 AM 25%

End-term September 5, 10 AM 40%Group Project September 3 25%


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Accounting

SystemInputs? Outputs?

Other?

Technology?

Users?


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Assets = Liabilities + Shareholders Equity


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= +

+ - +-

-


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Equity and Liabilities Assets

Equity:

Share Capital 2,957 Fixed Assets 45,394Retained profit andOther Items E Goodwill 32,160

Total Equity 184,667 Investments A

Minority Interest 3,617 Deferred Tax Assets 1,679

Liabilities:

Secured Loans 312 Inventories 178

Unsecured Loans C Unbilled Revenues 12,011

Total Loans 1,032 Debtors 58,554Current Liabilities andProvisions 83,938 Cash and Bank Balances 47,185Deferred TaxLiabilities 686 Other Current Assets 39,958

Total Liabilities D

Total Liabilities and Equity 273,940 Total Assets B


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Profit/Loss = Revenues Expenses


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Mar '12 Mar '11 Mar '10 Mar '09 Mar '08

Net Profit Before Tax 97.81 113.83 65.67 -64.36 14.52

Net Cash From Operating Activities 36.98 137.24 82.24 101 14.19

Net Cash (used in)/from Investing

Activities -119.07 -287.42 -87.97 -94.17 -153.01

Net Cash (used in)/from Financing

Activities 85.63 149.74 -6.99 3.16 43.08

Net (decrease)/increase In Cash andCash Equivalents 3.54 -0.44 -12.72 9.99 -95.74

Opening Cash & Cash Equivalents 2.36 2.81 15.53 5.54 101.26

Closing Cash & Cash Equivalents 5.9 2.36 2.81 15.53 5.53

Source : Dion Global Solutions Limited


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Year -2 -1 0 1 2 3Median Return on

Assets 0.21% 0.33% 0.19% -0.97% -0.67% -0.23%% Negative 48% 44% 46% 64% 60% 53%

Source: S. Rangan, 1998, Earnings management and theperformance of seasoned equity offerings, Journal ofFinancial Economics


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Khushbu and Ruchi own the KR Bakery, a partnershipfirm. Their ownership interest, known as equity, equalsRs. 20,000.

One afternoon, each takes Rs. 1,000 from the firmscash register to go shopping. An accounting report of

the KR Bakery would show that:

A. The change in the entitys equity is zero

B. The entity has Rs. 2,000 less cash

C. The entity has Rs. 2,000 less equity

D. K and R each have Rs. 1,000 more cash


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On December 31st, 2009, The Balance

Sheet of Morgan Co reported total assetsof Rs. 5,00,000. If Morgan &Co ceases tooperate,

A. Its assets could be sold for Rs. 5,00,000B. Its assets could be sold for approximately Rs.

5,00,000

C. Its assets could be sold for at least Rs. 5,00,000

D. We do not know what its assets could be sold for.


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Accounting reports only those facts that canbe stated as monetary amounts

Which of the following can be learned fromreading a balance sheet of Unni & Company

A. How much cash Unni & Company has

B. The health of Mr. Unni

C. How much Unni & Company owes

D. A strike is beginning at Unni & Company


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Accounting Principles:

1. Historical Cost2. Revenue Recognition

3. Full Disclosure

4. Matching

5. Conservatism

6. Materiality

7. Cost/Benefit

Qualitative Characteristics of Financial Information:

1. Relevance2. Reliability

3. Comparability

4. Consistency


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IIMB Term1 PGP Chapter1

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