25 terms
Absorption and activity based costing
Absorption costing builds the full cost of a product by sharing all factory overheads across every unit made. Five key t
Absorption and activity based costing
Absorption and activity based costing
Absorption costing builds the full cost of a product by adding direct costs directly to it and sharing indirect costs (o
Absorption and activity based costing
Absorption and activity based costing
Activity based costing (ABC) groups indirect costs by the activity that causes them. It then charges each product based
Absorption and activity based costing
Absorption and activity based costing
Activity based costing (ABC) assigns direct costs straight to a product. It then groups indirect costs into cost pools a
Absorption and activity based costing
Absorption and activity based costing
Once a business knows the total cost of a product, it adds a profit mark-up to set a selling price. Absorption costing a
Absorption and activity based costing
Absorption and activity based costing
Each costing method produces different inventory values and profit figures. Knowing the strengths and weaknesses of each
Absorption and activity based costing
Accounting concepts used in the preparation of accounting records
Accountants follow ten agreed rules called accounting concepts. These concepts keep financial records honest, comparable
Accounting concepts used in the preparation of accounting records
Accounting concepts used in the preparation of accounting records
Accounting concepts are rules that guide how accountants record and report financial information. Each concept applies t
Accounting concepts used in the preparation of accounting records
Accounting for limited companies
Limited companies must produce a set of formal financial statements each year. These statements follow international rul
Accounting for limited companies
Accounting for limited companies
AQA will never ask you to prepare group accounts or a statement of comprehensive income. You only need to know the finan
Accounting for limited companies
Accounting for limited companies
When a non-current asset rises in value, a company records the increase. It credits a revaluation reserve — not profit —
Accounting for limited companies
Accounting for limited companies
A limited company can raise or reorganise its share capital in three ways. Each method affects the statement of financia
Accounting for limited companies
Accounting for limited companies
Limited companies must publish their financial accounts by law. Different groups — such as investors, lenders, and emplo
Accounting for limited companies
Accounting for limited companies
International accounting standards are agreed rules that tell companies worldwide how to prepare their financial stateme
Accounting for limited companies
Accounting for organisations with incomplete records
Some businesses only keep basic financial records. You can still calculate their profit by comparing what the business o
Accounting for organisations with incomplete records
Accounting for organisations with incomplete records
When a business has not kept full accounting records, accountants use specific techniques to reconstruct missing figures
Accounting for organisations with incomplete records
Accounting for organisations with incomplete records
Businesses can keep financial records in different ways. Each system has trade-offs between simplicity, cost, and the ac
Accounting for organisations with incomplete records
An introduction to the role of the accountant in business
An accountant manages a business's financial records, reports, and controls. They ensure the business has accurate money
An introduction to the role of the accountant in business
An introduction to the role of the accountant in business
Accounting splits into two branches. Financial accounting reports a business's past performance to outsiders. Management
An introduction to the role of the accountant in business
An introduction to the role of the accountant in business
Accountants design and manage the systems a business uses to collect and process financial data. These systems produce i
An introduction to the role of the accountant in business
An introduction to the role of the accountant in business
Accountants supervise bookkeepers and ledger clerks. Bookkeepers record day-to-day financial transactions, and ledger cl
An introduction to the role of the accountant in business
Analysis and evaluation of financial information
Financial ratios are calculations that turn raw accounting figures into meaningful measures. They tell you how profitabl
Analysis and evaluation of financial information
Analysis and evaluation of financial information
Businesses use ratios and financial statements to judge how well they are performing. Accountants group these judgements
Analysis and evaluation of financial information
Analysis and evaluation of financial information
Profit and cash are not the same thing. A business can earn high profits but still run out of cash — and some transactio
Analysis and evaluation of financial information
Analysis and evaluation of financial information
Financial statements and ratios only tell part of the story about a business. They miss important factors — like staff q
Analysis and evaluation of financial information