现金收付制和权责发生制

Team Leader:LaurelTeammates:Judy,Michelle,Lydia,Wendy,Sylvia MichelleLaurelJudySylvia LydiaWendy权责发生制和收入确认权责发生制和收入确认权责发生制和收入确认权责发生制和收入确认Key words and phrasesComponentpart 组成部分Complicationsproblems 复杂的问题Illustrateshow 举例说明Leasehire for an extend period 租赁Projected salesforecast sales 计划销售量Generateproduce 产生Fraudulentcriminal 欺诈行为Manipulatechange for your own benefit 操控Fictitiousmade up,unreal 虚假的Instancecase,event 实例Incur/incurredwhen some event happens 导致 Receiptproof of payment 收据Invoiceproof of credit transaction发票，销售清单Accounts receivable/debtors-credit customers who owe you money for inventory sales 应收账款Accounts payable/creditorscredit suppliers who you owe money to for inventory purchases 应付账款Accrual/accrued expensean expense that has been incurred but the actual amount is not yet known eg.telephone bill 预提费用Deductsubtract,take away 扣除Depreciationspreading cost of a fixed asset over its estimated useful economic life 折旧Capital Allowancefull cost of purchasing a fixed asset can be treated as a expense for tax purpose only 资产的税务津贴Validacceptable 有效的Exceedbecome greater 超出Give/given/giving rise to-causing引起，导致Criteriarule,condition,constraint 标准FASB(1984)SFAC No.1 Information about earnings and its Information about earnings and its components measured by accrual components measured by accrual accounting provides a better accounting provides a better indication of enterprise performance indication of enterprise performance than information about current than information about current receipts and payments.receipts and payments.ALL listed companies in china and elsewhere are required to use accrual accounting.The main implications of this are that reported net income and net cash flow for a period will usually be different.Also,accounting profit and taxable profit will usually not be the same.QuestionDistinguish between accrual and cash accounting.Why does accrual accounting usually lead to different figures for accounting profit and taxable profit?1.2.A basic assumption that revenues are recognized when earned and expenses are recognized when incurred without regard to when cash is received or paid.A system of accounting in which revenues and expenses are recorded as they are received and paid.Accrual accountingCash accounting Definitions Cash received from customers 100,000Cash paid to suppliers of inventory 70,000Beginning accounts receivable 8,000Ending accounts receivable 10,000Beginning accounts payable 6,000Ending accounts payable 7,000Unpaid bill at the year end 5,000Depreciation charge for the year 3,000Expenses paid in cash 20,000(including payments in advance of 2,000)ignore inventoryYou are provided with the following information for the financial year of a business.Revenue statementsCash basis.Sales 100,000Cost of sales (70,000)Expenses (20,000)Profit 10,000Accrual basis.Sales 102,000Cost of sales (71,000)Expenses (26,000)Profit 5,000QuestionDistinguish between accrual and cash accounting.Why does accrual accounting usually lead to different figures for accounting profit and taxable profit?1.2.Because tax law and accounting rules are different.A very good example is tangible fixed assets.When a business purchases a fixed asset the accounting treatment is to write off the cost over its estimated useful life as depreciation.However,for tax purposes,the full cost can be deducted in the year of purchase;this is called a Capital Allowance.10,000 1,000 each yearAccounting profit:A profit of 25,000 for that yearTaxable profit:16，000(25,000+1,000-10,000)Tax rate:40%Tax expense:6,400Value Added Tax Consumption-type VAT Income-tax Production-based value-added tax Trade loadingIn the 1980s RJR Nabiscothe second largest provider of tobacco and snack food products in the USA,routinely sent more inventory to customers than they had actually ordered.Once sent it would be recognized as revenue which would inflate profit.The return of un-ordered goods would be recorded in the following period.Whats wrong with RJR.?Whats wrong with RJR.?Revenue RecognitionCriteria 2Goods or services Goods or services are providedare provided to to the buyer.the buyer.Payment or valid promise of Payment or valid promise of payment payment must be receivedmust be received by the by the seller.seller.Criteria 1Case Regina Co.This company which made and sold vacuum cleaner went a lot furture than RJR.Because of a design fault 400,000 of the units they had sold were returned.These returns were not recorded.They also started to record sales when goods were ordered rather than when they were sent.PerformanceToTo ensure that projected sales figures ensure that projected sales figures were achieved for the year ended were achieved for the year ended June 30 1988 the company generated June 30 1988 the company generated$5.4 million$5.4 million of fictitious sales invoices of fictitious sales invoices for for the last three business daysthe last three business days of the of the year.year.QuestionCash VS.accrual accounting4.The cash basis and accrual basis can give quite different pictures of a firms operating performance.It will depend on the business in question.How big will the difference be after all?StarCash cowProblem childDogThe Boston MatrixMarket GrowthHighLowMarket share HighLowLet us guess ConclusionsStar-In a growing company,cash needs would exceed net income because of the need to increase working capital and the fixed assets Different picturesSimilar picturesCash cow-In a firm that has been in existence for quite some time and that has reached a steady state,the levels of receivables,inventory,and payables are often fairly constant.QuestionCould either of the above cases have happened under a system of cash accounting?5.Trade loadingIn the 1980s RJR Nabiscothe second largest provider of tobacco and snack food products in the USA,routinely sent more inventory to customers than they had actually ordered.Once sent it would be recognized as revenue which would inflate profit.The return of un-ordered goods would be recorded in the following period.Case Regina Co.This company which made and sold vacuum cleaner went a lot furture than RJR.Because of a design fault 400,000 of the units they had sold were returned.These returns were not recorded.They also started to record sales when goods were ordered rather than when they were sent.If all payments and receipts go through a bank account then,apart from not recording sales returns,the answer to this question is“no”.Why does the FASB favour the accrual basis?Because it gives a much fuller picture of business.Team Leader LaurelTeammates：Judy,Michelle,Lydia,Wendy,Sylvia Thank you!Thank you!。