Financial Statement Fundamentals (7 of 39): Accrual Accounting скачать в хорошем качестве

Financial Statement Fundamentals (7 of 39): Accrual Accounting

Get more in-depth lessons via Axel's Accofina books: (1) Financial Statement Basics https://www.amazon.com/Financial-Stat... (2) Ratio Analysis Fundamentals https://www.amazon.com/Ratio-Analysis... Financial Statement Fundamentals (7 of 39): Accounting Equation Support the AccoFina Patreon if you're a fan, or believer, in my work:   / accofina   Time Markers: 1) Introducing Myself 0:22 2) Intro to Accrual Accounting 1:14 3) Example Transaction 'A' 1:44 4) Non-Cash Items in the Financial Statements 3:07 5) Why on Earth do Accountants use Accrual Accounting? 4:04 6) Example Transaction 'B' 4:40 Help Contribute to the Translation of this Video's Captions, Title and Description into Your Language: http://www.youtube.com/timedtext_vide... FINANCIAL STATEMENT FUNDAMENTALS How to Understand the Story of Any Business at Any Time Lecture: Accrual Accounting ACCRUAL ACCOUNTING Income is recognised when earned Expenses are recognised when incurred ...And this has NOTHING WHATSOEVER to do with when cash is actually paid or received! This is accrual accounting! Accrual Accounting Example Transaction 'A': QUESTION... "Within my own business, Accofina, I sell books through Amazon. Amazon pays me royalties 60-days after the end of the month. So: I sell a book on 14th January & Amazon pays me that royalty around 31st March ...when do I recognise that royalty revenue in my financial statements?" a) 14th January? b) 31st March? c) 2nd August? ANSWER... According to Accrual Accounting: 14th January ...when Income is Earned. Non-cash items in Financial Statements: Accrual accounting means that financial statements have non-cash items i.e. There are recorded transactions (and adjustments) in the financial statements where no financial cash transfer has taken place. Examples... Apart from the January 14th income recognised described earlier, there are items like depreciation expenses, impairment losses & accrued interest and many others. Why on Earth do accountants use accrual accounting???: Its the accountants’ attempt (and estimations) at describing economic reality ...not just cash movements. Accountants (including you) want to describe the economic performance and position of a business not just the cash performance and position Not convinced yet? Forgot the ‘short’ timeframe example of accofina’s Amazon book sales Now think about Boeing selling 787 Dreamliner’s to the government-owned Emirates airline... Accrual Accounting Example Transaction 'B': 2015: Boeing takes an order for 20 Dreamliners 2016: Boeing builds 5 of these 2017: Boeing builds 5 more 2018: Emirates makes a 15% payment on the full order & Boeing finishes the final 10 2019: Boeing delivers 20 Dreamliners to Emirates in Dubai 2020: Boeing manufacturing staff have a very long project completion party 2021: Emirates pays the remaining 85% outstanding on the order Now imagine Boeing’s Financial Statements WITHOUT Accrual Accounting... 2018 & 2021: Boeing earns revenue when paid cash 2015, 2016, 2017, 2019 & 2020: Boeings Income Statement is a sparse, empty wasteland showing zero activity. How useful would these statements be to managers, investors, creditors, tax authorities, etc? Accrual Accounting Shows Economic Reality & ‘Tells the Story’ With accrual accounting: Boeing’s statements would show manufacturing activity in all years (except that party year), best ‘estimates’ of revenue and expenses in all years best ‘estimates’ of economic reality in the balance sheet too This video was brought to you by AccoFina... Subscribe to the Channel: https://goo.gl/84Sfeg Or just check out the Channel Page: https://goo.gl/yTj9Bs Most Popular YouTube Video: https://goo.gl/Jbv685 Latest YouTube Upload: https://goo.gl/wDM83Y http://www.accofina.com http://www.amazon.com/author/axeltracy   / accofina   http://plus.google.com/+accofina   / axel_accofina     / accofina.page   #Accounting #FinancialEducation #FinancialStatementFundamentals