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SCHOOL OF BUSINESS
ADMINISTRATION

by
Pr. BENHAYOUN Issam

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https://www.youtube.com/watch?v=-MlkASchodc&t=80s

1. Understand ethical concepts ;

2. Comprehend and apply general BA
concepts, methods and techniques ;
3. Discern relevant data for managerial
decision-making

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• MTH 1305 Mathematics for Business;

or
• MTH 1311 Calculus I: Differential
Calculus; or
• MTH 1304 Discrete Mathematics for
Engineers

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INTRODUCTION
TOPIC 1 : Accounting as a Form of Communication
TOPIC 2 : Financial Statements and the Annual Report
TOPIC 3 : Processing Accounting Information
TOPIC 4 : Income Measurement and Accrual Accounting
TOPIC 5 : Inventories and Cost of Goods Sold
TOPIC 6 : Receivables and Investments
TOPIC 7 : Operating Assets: Property, Plant and Equipment, and
Intangibles
TOPIC 8 : Liabilities
TOPIC 9 : Stockholders’ Equity
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INTRODUCTION
TOPIC 1 : Accounting as a Form of Communication
TOPIC 2 : Financial Statements and the Annual Report
TOPIC 3 : Processing Accounting Information
TOPIC 4 : Income Measurement and Accrual Accounting
TOPIC 5 : Inventories and Cost of Goods Sold
TOPIC 6 : Receivables and Investments
TOPIC 7 : Operating Assets: Property, Plant and Equipment, and
Intangibles
TOPIC 8 : Liabilities
TOPIC 9 : Stockholders’ Equity
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I. What is Accounting ?

II. Why is it important ?

III. For whom we do it ?

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What ? Why ? For Whom ?

› Rent a new property

› Recruit workforce
› Buy necessary equipment
› Diversify the products
› Produce more quantities 8
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What ? Why ? For Whom ?

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What ? Why ? For Whom ?

OBSERVOR

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What ? Why ? For Whom ?

IDENTIFYING

MEASURING

COMMUNICATING

Permit informed judgments

and decisions by users of the
information.
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What ? Why ? For Whom ?

Investors

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What ? Why ? For Whom ?

SAME METHODS
METHODS
OF RECORDING

20th Century
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What ? Why ? For Whom ?

de facto de jure

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What ? Why ? For Whom ?

de facto de jure

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INTRODUCTION
TOPIC 1 : Accounting as a Form of Communication
TOPIC 2 : Financial Statements and the Annual Report
TOPIC 3 : Processing Accounting Information
TOPIC 4 : Income Measurement and Accrual Accounting
TOPIC 5 : Inventories and Cost of Goods Sold
TOPIC 6 : Receivables and Investments
TOPIC 7 : Operating Assets: Property, Plant and Equipment, and
Intangibles
TOPIC 8 : Liabilities
TOPIC 9 : Stockholders’ Equity

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INTRODUCTION
TOPIC 1 : Accounting as a Form of Communication
TOPIC 2 : Financial Statements and the Annual Report
TOPIC 3 : Processing Accounting Information
TOPIC 4 : Income Measurement and Accrual Accounting
TOPIC 5 : Inventories and Cost of Goods Sold
TOPIC 6 : Receivables and Investments
TOPIC 7 : Operating Assets: Property, Plant and Equipment, and
Intangibles
TOPIC 8 : Liabilities
TOPIC 9 : Stockholders’ Equity

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TOPIC 1 : Accounting as a Form of Communication

1. Explain what business is about.
2. Distinguish among the forms of organization
3. Describe the various types of business activities
4. Identify the primary users of accounting information and their needs.
5. Explain the purpose and the relationships among financial statements
6. Identify and explain the primary assumptions made in preparing Fin. Stat.
7. Accounting standards setting and the role of auditors in Fin. Stat.
8. The role that ethics plays in providing useful financial information
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All activities necessary to provide the members of an

economic system with goods and services.

GOODS AND PRODUCTS SERVICES

MANUFACTURING DISTRIBUTION OTHERS

RETAILERS WHOLESALERS

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GOODS AND PRODUCTS COMPANIES SERVICE COMPANIES

Supplier Manufacturer:
: Flour Biscuits
(Mill) (Bimo)
Service
companies:
Transportation
(Aramex)
Distributor
Wholesaler
(wholesale store)

Distributor
Retailer
(Grocery store)

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BUSINESS ENTITIES NON-BUSINESS ENTITIES

Entities aiming to earn a profit Entities aiming to serve the needs

of various segments of society

SOLE PARTNERSHIPS CORPORATIONS GOVERNMENT ENTITES PRIVATE ORGANIZATIONS

PROPRIETORSHIPS
A business owned A company, usually Hospitals,
A single-owner by two or more organized under the Federal State and Universities,
who manages individuals. They laws of a particular Government Local Cooperatives, and
and own, usually, agree to be state, who was and Its Governments Philanthropic
a small business partners, according incorporated. It has Agencies and Their Organizations
to an agreement the possibly to be
publicly traded. Specific type of Accounting (fund accounting)
Accounting = Economic entity concept
Issue stocks and bonds in a brief period.
Tax (IRS) = Individual concept (Owner) 3 advantages Ownership is transferred easily.
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FINANCING ACTIVITIES INVESTING ACTIVITIES OPERATING ACTIVITIES

Activities necessary to start Activities that provide a Activities necessary to run a
a business, and funds are Business with future Business in a day-to-day
obtained from both economic benefits. basis. This incurs expenses
stockholders or creditors Labelled as Assets. and provides revenues for a
company
An The Outflow of Salaries
Patent
Liabilities

obligation Expenses
assets resulting
of a from the sale of
business Accounts payable goods and services
Equipment
Capital Stock

The dollar
Revenues

The Inflow of assets

amount of resulting from the
Stock sold to sale of products and Interests
the public Shareholder services
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Raising money to start a Business

(stocks or debts)

FINANCING
ACTIVITIES

Other profits are reinvested

OPERATING in productive assets INVESTING
ACTIVITIES ACTIVITIES

Generating revenues Using Assets to

(Sales …etc.) generate revenues Buying Assets
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INTERNAL USERS EXTERNAL USERS

Individuals involved in the daily affairs of Individuals not directly involved in

the business. Primarily the managers the operations of a business.

For corporate decision-

For investing, financing,
making purposes, managers
governments agencies’
need information related to
controlling purposes,
budgets, costs, monthly
external users need the
payrolls gathered in
financial statements of
Management Accounting
the company.
reports

MANAGEMENT ACCOUNTING FINANCIAL ACCOUNTING

The branch of accounting concerned with The branch of accounting concerned
providing internal users (management) with with communication with outsiders
information to facilitate planning and control through financial statements
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Categories Examples of
Common Decision Relevant Question
of Users Users
Expanding our product- How much will it cost to add a
Internal Managers
line new product?
Investors (or Buying (or selling) shares How much did the company earn
Stockholders) of the company. last year?
Lending money to the What debts or liabilities does the
Bankers
company. company have?
How much is it paying out in
External Asking for a raise or a salaries and wages? Is the
Employees
promotion/Get recruited company performant and
financially stable ?
What is the current amount of the
Selling my product to the company’s accounts payable? Has
Supplier
company by credit the company the capacity to pay
its suppliers?
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THE BALANCE
SHEET

The accumulated wealth.

THE
STATEMENT OF THE INCOME
CASH-FLOWS STATEMENT

The company’s capacity The performance of a

to generate cash Business on a period
THE STATEMENT
OF RETAINED
EARNINGS
The accumulated income earned and dividends paid
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Accumulated statement that determines the wealth (financial position)

of a company at a certain date.

Summarizes the assets, liabilities, and owners’ equity of a company.

Most commonly prepared on the last day of a month, quarter, or year

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ASSETS LIABILITIES OWNERS’ EQUITY

LEFT SIDE RIGHT SIDE
Items that are valuable economic
resources and that will provide future It indicates who provided, or has a
benefit to the company claim to, those assets.

Example 1: A Company has acquired a raw materials and the payment is due in 60 day
INVENTORIES ACCOUNTS PAYABLE
Example 2: An Owner have brought equipment for the company
EQUIPMENT SHAREHOLDERS’ EQUITY
Example 3: The company receives an amount of money. 50% is from stockholders
(buying new stocks) and the remaining 50% is provided by a bank.
CASH NOTE PAYABLE SHAREHOLDERS’ EQUITY
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Unlike the balance sheet, an income statement is a flow statement.

Summarizes the revenues and expenses of a company for a period.

the excess of revenues over expenses appears as the bottom line

NET INCOME
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Accumulated earnings of a corporation less the amount paid

in dividends to stockholders.

explains the change in retained earnings for the period.

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summarizes the cash flow effects of a company’s

operating, investing, and financing activities for the period

it shows the reader where a company got cash during the

year and how it used that cash.

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These are assumptions made by the Conceptual Framework.

The latter is a foundation for the specific principles and
standards needed by the accounting profession.

ECONOMIC ENTITY COST AND FAIR VALUE GOING CONCERN TIME PERIOD
CONCEPT ASSUMPTION
HISTORICAL FAIR-VALUE An entity is not
An identifiable, COST MODEL in the process Artificial segment
specific entity of liquidation on the calendar
must be the Assets are Assets are and that used as the basis
subject of a set initially recorded recorded at it will continue for preparing
of financial at the cost to their market indefinitely. financial
statements acquire them. value. statements

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Accounting is based on standards, methods, rules and

practices made by specialized bodies.

U.S. GAAP

The federal agency with The group in The professional organization of

ultimate authority to certified public accountants that The organization
the private
determine the rules for advises the FASB and in the past formed to develop
sector with
preparing statements for was involved in setting the worldwide accounting
authority to
companies whose stock is set accounting auditing standards to be followed standards
sold to the public. standards. by public accounting firms

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Ethics plays a critical role in providing useful financial information.

Investors and other users must have confidence in a company, its

accountants, and its outside auditors that the information presented in
financial statements is relevant, complete, neutral, and free from error

Example 1: Companies may use aggressive accounting practices to misrepresent their

earnings, and executives may misuse their companies’ funds.

Example 2: a corporate board of directors that undermines the goals of its own company
or a public accounting firm that fails its auditing duty to watch for and disclose
wrongdoing

Example 3: in certain circumstances, it appears as if GAAP may not have been used to
resolve particular accounting issues because there are several conflicting rules, because
no specific GAAP rules seem applicable, or because of fraud.
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