Accounting: An Introduction by Arthur Hindmarch

By Arthur Hindmarch

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Lee, Income and Value Measurement: Theory and Practice (London, Nelson, 1974). 1 What do you understand by the following terminology? 2 List the different individuals or groups who might be interested in accounting information. What different aspects might they be interested in? 3 What, in your view, constitutes a healthy company? 4 Draw a diagram which illustrates that value is a stock, and profit a flow, concept. 5 A firm borrows £10,000 on 1 January. DuringJanuary it buys goods for £6000 and then sells half of them for £5000.

Are similar to those in this country but there are features which merit special attention. ) was set up as a government 'watchdog' over the operation of companies. I t has been particularly concerned with the content of financial statements and has the authority to prescribe the accounting principles used in these statements. ) into taking a more positive role in defining accounting principles. This they did by setting up the Committee on Accounting Procedure in 1938 which was replaced in 1959 by the Accounting Principles Board, in turn replaced in 1973 by the Financial Accounting Standards Board.

What problems arise because of the necessity for such regular reporting? 8 Prepare a balance sheet from the following information, which is for the Anderson Company as at 30 June 19X3. 8 has been in business for two years only. It started on 1 July 19X 1 with £4000 cash borrowed from the bank. At 30 June 19X2 it had inventory £2000, debtors £3000, machinery £3000, and a bank overdraft of £3000. What is its profit for each of the two years to 30 June 19X3? 1 Introduction In Chapter 1 it was stated that the central objective of accounting measurement was to provide information about the well-being of the firm.

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