Memes - The file contains meme that pertains to several topics on accounting. PDF

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The file contains meme that pertains to several topics on accounting....

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CHAPTER 11: OPERATING SEGMENTS

Segment reporting is the disclosure of certain financial information about the products and services an entity produces and the geographical areas in which an entity operates. It enables the investors and users to make better assessment of each business activity leading to the understanding of the performance of the entity as a whole. To be considered a reportable segment an entity shall report information about the operating segments that meets the qualitative threshold for revenue, profit or loss and assets.

CHAPTER 12: DERIVATIVES (INTEREST RATE SWAP)

Hedging means designating one or more hedging instruments so that the change if fair value or cash flows is an offset, in whole or in part, to the change in fair value or in cash flows of a hedged item. Simply stated, hedging is a means of protecting a financial loss or the structuring of a transaction to reduce risk.

CHAPTER 13: DERIVATIVES (FORWARD, FUTURES AND OPTIONS)

An option is a contract that gives the holder the right to purchase or sell an asset at a specified price during a definite period at some future time. It is a right and not an obligation to purchase or sell. There are two types of options namely: call option (gives the holder the right to purchase an asset) and put option which gives the holder the right to sell an asset.

CHAPTER 14: CASH AND ACCRUAL BASIS

Cash basis accounting generally recognizes all revenue as it is received and all expenses when the money is spent. This means that whenever you look at your bank balance, you know exactly what resources are at your disposal. On the other hand, accrual accounting recognizes revenue when it’s earned and expenses when they are billed (or in some cases as earned by the counterparty). This type of accounting is more popular among larger businesses but is typically more complicated and, at times, more labor-intensive.

CHAPTER 15: SINGLE ENTRY

Single-entry bookkeeping, also known as, singleentry accounting, is a method of bookkeeping that relies on a one-sided accounting entry to maintain financial information.

CHAPTER 16: ERROR CORRECTION

Error Correction is the correction of an error in financial statements that were previously issued. Error corrections can be an error in the measurement, recognition, presentation or disclosure in financial statements. These errors are caused by mathematical mistakes, mistakes in applying the Generally Accepted Accounting Principles (GAAP) or oversight of details existing when the financial statements were prepared.

CHAPTER 17: STATEMENT OF CASH FLOWS

A Statement of Cash Flows is a component of financial statements summarizing the operating, investing, and financing activities of an entity. In simple language, the statement of cash flows provides information about the cash receipts and cash payments of an entity during a period.

CHAPTER 18: BOOK VALUE PER SHARE

Book Value per Share (BVPS) is the minimum cash value of a company and its equity. It expresses the minimum value that would be available to common shareholders after debts are paid. In essence, the book value peer share seeks to find out how much are people with common stocks entitled to from the company’s equity based on the number of shares they own.

CHAPTER 19: BASIC EARNINGS PER SHARE

The Earnings per Share is the amount attributable to every ordinary share outstanding during the period. To compute for the basic earnings per share, the net income is divide into the number of shares outstanding ( the net income is equal to the amount after deducting dividends on preference share).

CHAPTER 20: DILUTED EARNINGS PER SHARE

Dilution arises when the inclusion of the potential ordinary shares decreases the basic earnings per share or increases the basic loss per share. The potential ordinary shares are called dilutive securities. The computation of the diluted earnings per share is based: (1) “as if” the convertible bond payable is converted into ordinary shares, (2) “as if” the convertible preference share is converted into ordinary share; (3) “as if” the share options and warrants are exercised....