Business Accounting and Finance 2e

For Non Specialists Catherine Gowthorpe, Oxford Brookes University ISBN-13: 9781844802005 eISBN-13: 9781844808199 ISBN: 1844802000 eISBN: 184480819X MARC Record [.mrc format] Business Accounting and Finance for Non Specialists is aimed at non-specialist students of accounting and finance on a first course in the subject. It gives a lively and wide-ranging survey of the basic principles of finance, financial accounting and management accounting. The unique approach taken in the first Section of the book is to look at small to medium sized business organisations and their role in the economy - how they are set up, factors in their success and failure and how they source funds for expansion. This leads to discussion of the role of financial markets and their need for financial information. Sections 2 and 3 then give an account of financial and management accounting principles, respectively. The text is clearly written and technical jargon is minimal - any technical terms are clearly explained and a glossary of terms is provided. The book does not present the hurdle of double-entry bookkeeping at an early stage - students can progress through the book without double-entry. Illustrative case studies and reference to real-life business examples are used to bring the technical information to life. Business Accounting and Finance for Non-specialists includes a large number of worked examples, to give students valuable practice in using their new skills. Other pedagogic elements include aims and learning outcomes, summaries, Case Studies with questions and solutions, individual learning activities, self-test questions with answers provided in the book, and exercises - the answers to which are divided between the book and the Lecturer's Guide/Website.

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Chapter Abstracts Ch. 1 Introduction to Business Organisations and Finance Chapter One covers the differences between the sole trader, partnership and company forms of business organisation, including the advantages and drawbacks of each type; the different sources of business finance available to commercial organisations; the outline about some important features of the business environment including the various ways in which tax is charged on businesses Ch. 2 Starting a Business Chapter Two covers the most common sources of business finance for start-ups and the need for and the principal elements of the business plan Know about the most common reasons for business failure Ch. 3 The Growing Business Chapter Three covers the important stages in business expansion; the problems and opportunities presented by business growth, including issues related to employment, developing the business organisation and moving into new markets; the typical money management issues that face the proprietors of successful and growing businesses and that business growth inevitably involves risk Ch. 4 Large Businesses Chapter Four covers the operation of the UK stock market; the reasons why companies choose to have their shares publicly quoted; the fundamentals of what is involved in listing; the advantages and drawbacks of operating as a listed company; the need for information about listed companies; the principal sources of information concerning them and how to obtain relevant information Ch. 5 The Role of Accounting in Business Chapter Five covers why accounting information is produced, the principal groups in society who need and use accounting information, the principal characteristics and features of accounting information, the distinction between financial accounting and management accounting, the functions that accountants perform in the production ofaccounting information and the reasons why business managers should be able to understand accounting reports Ch. 6 The Balance Sheet Chapter Six covers the terminology used in a balance sheet, how to draw up a balance sheet for a sole trader from a list of account balances and explanatory notes and how to understand and comment on the basic information conveyed by a balance sheet Ch. 7 The Profit and Loss Account Chapter Seven covers the terminology used in a profit and loss account, how to draw up a profit and loss account for a sole trader from a list of account balances and explanatory notes, how to understand and comment on the basic information conveyed by a profit and loss account and how to combine skills gained as a result of studying Chapters 6 and 7 to draw up a set of financial statements comprising a profit and loss account and balance sheet Ch. 8 Adjustments to the Profit and Loss Account and Balance: 1 Chapter Eight covers the treatment in the profit and loss account of complexities such as discounts and returns of goods, some of the important conventions in accounting for recognition of income and expenses, the need for provisions against certain current assets, appropriate adjustments to the profit and loss account and balance sheet. The chapter is divided into the following principal sections: Consideration of some additional items that may be included in the profit and loss account - namely, returns of goods, discounts and delivery charges, an introduction to some of the main conventions in accounting, including the important principle of matching (accruals) and adjustments that may be required in respect of stock and debtors Ch. 9 Adjustments to the Profit and Loss Account and Balance: 2 Chapter Nine covers the need for depreciation and amortisation in financial statements, the distinction between tangible and intangible fixed assets and how to incorporate adjustments for depreciation and amortisation into a profit and loss account and balance sheet Ch. 10 Cash Flow Chapter Ten covers the important role that cash plays in business, the distinction between profit and cash and simple cash flow statements for a sole trader business Ch. 11 Financial Reporting by Limited Companies Chapter Eleven covers the regulations relating to accounting by companies, the roles of directors in respect of company financial reports, how to draw up simple financial statements for a simple limited company and the need for additional financial and non-financial reporting by listed companies Ch. 12 Understanding Financial Reports: Analysis of Trends Chapter Twelve covers the potential usefulness of financial reports to various interest groups, the principal features of the analysis of trends in financial statements, how to perform an analysis based on horizontal and/or vertical analysis of financial statements and the problems that can arise in comparing businesses with each other Ch. 13 Understanding Financial Reports: Using Accounting Ratios Chapter Thirteen covers the usefulness of accounting ratios in financial analysis, how to calculate a range of accounting ratios and how to use the knowledge of accounting ratios to assist in the analysis of financial statements Ch. 14 Management and Cost Accounting Information Chapter Fourteen covers the need to generate accounting information for use within the business organisation, the range of uses for internal accounting information and some basic terminology such as planning, control and decision making Ch. 15 Costing Chapter Fifteen covers a range of basic costing terminology, how to classify costs into direct and indirect costs, the build-up of materials, labour and production overheads into full production cost, how to apportion costs between cost centres, how to calculate and apply suitable overhead absorption rates and the basic principles of activity-based costing Ch. 16 Budgeting Chapter Sixteen covers the role of budgeting in planning and controlling business organisations, straightforward budget statements for a small business, the stages involved in setting a budget for a larger business organisation, some of the behavioural issues that may arise and how to evaluate actual outcomes against budget plans Ch. 17 Standard Costing, Flexible Budgeting and Variance Analysis Chapter Seventeen covers the use of a standard costing system in a manufacturing environment, actual results against flexed budgets and the range of possible reasons for the variances that emerge from comparison of actual with standard costs Ch. 18 Marginal Costing for Decision Making Chapter Eighteen covers the nature and classification of costs as variable, fixed or semi-variable, different types of cost in a graph, cost-volume-profit analysis to establish a break-even point and to assist in business decision making, the figures and issues involved in making decisions and acceptance of contracts at special prices, extension of production capacity and prioritising of production in conditions where limiting factors exist Ch. 19 Pricing Chapter Nineteen covers the interaction between supply and demand and the interdependence of price and quantity, the various additional factors that play a part in pricing decisions, the interface between pricing and costing, with special reference to cost-plus pricing and how to apply knowledge of pricing issues across a range of industries and commercial activities Ch. 20 Capital Investment Decisions Chapter Twenty covers the concept of capital budgeting and the need for control over capital investment decision making, two simple methods of capital investment appraisal: payback and accounting rate of return, the time value of money and more complex methods of capital investment appraisal: net present value and internal rate of return Ch. 21 Performance Measurements and Reporting Chapter Twenty One covers the reasons for, and nature of, performance reporting within organisations, why larger organisations often divide their activities into divisions, the advantages and drawbacks of divisionalisation, the nature of financial performance measurement in divisions, the importance of non-financial measures within organisations and the 'Balanced Scorecard' approach to financial and nonfinancial performance measurement

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