Monday, 6 April 2015
ASS#1 DRAFT (Comments/KCQ's)
Chapter 1: A Way Of Viewing Business
Here are the key concepts and questions I came across while reading Chapter 1:
- 4 types of businesses: Sole trader, Partnerships, Company and Trust. The type of the business can really impact their reporting requirements.
- Double-entry a system of bookkeeping, is also known as double-entry accounting. A system that ensures records entered to an account has a corresponding and opposite entry to a different account.
- Two types of books in Accounting: Journals & Ledgers:
Journal: List of transactions as recorded within a given day.
Ledger: List of transactions within individual accounts as assets, liabilities, equity, revenue and expenses.
- Difference between a book keeper and an accountant:
I discovered that a Book Keeper (is known as an Accounting Clerk) and writes the journals, ledgers and trial balances. Whereas, an Accountant merely prepares financial statements based on the journals, ledgers and trial balances. I expected an accountant would do it all.
- Accounting Equation: Assets = Equity + Liabilities
What I found confusing?
I found the concept of understanding the accounting equations quite confusing at first. I did not have a full understanding of the 5 elements of accounting and their meanings and how they affect each other in an equation. I find this to be an important aspect to grasp as it will help build my understanding when working on other aspects in the course.
What I found interesting?
I found interesting the fact that the concept of double entry accounting was first recorded from Luca Pacioli, a Franciscan monk in Italy in 1494. I am surprised that a monk was able to initiate the system which is still used today. Who would have thought that a monk would be the 'Father of Accounting'!
What I learnt in general:
Accounting isn't just about recording financial data ie. cash inflows and outflows. I learnt that various reports are legally required and is different according to whether or a business is a sole proprietor or a company.
I learnt the meanings of all the terminology, especially of the five elements of accounting. This I found also to be interesting, as these are every-day words that can be read in the news. It all makes more sense after reading Chapter 1.
Question to ask:
Would the current system of accounting ever be changed?
I don't believe the current system could change, at least not yet, as it has proven to work well through time.
What is the best accounting software available? Is MYOB and Quickbooks better for any particular reason?
Chapter 3:
Here are the key concepts and questions I came across while reading Chapter 3:
Financial Statements:
- The Balance Sheet, Income Statement, Statement of Changes in Equity, and Cash Flow Statement are related, but used for different purposes.
- Cash is the most important asset of a business. Without it, a business cannot function.
- One way of analysing a financial statement is through Ratios. Surprisingly in the past, other businesses just 'do what works' and read their reports without thorough analysis.
What I find confusing:
I noticed that financial reports look similar across the board. As I compared Air New Zealand's with both other airlines' and other firms. Is there a proper convention that must be followed when creating these reports?
Before this course, I had never heard of a Statement of Changes in Equity and Cash Flow Statement. The Balance Sheet I find is easiest to read and understand. There is still some terminology used in these financial statements which I need to familiarise myself with. I plan to do this in the next week to enhance my learning.
What I need clarification on:
Dividends
Cash Flow
How are these used to place value on equity in a firm and how are these different?
Side comment:
As Chapter 3 progresses, the more complicated it gets. So I am guessing it's going to be the same for the other chapters and it's important that I understand these concepts before moving onto the next chapters to read.
About My Company
MY COMPANY FOR THIS ASSIGNMENT IS AIR NEW ZEALAND LIMITED.
VISION:
THE VISION OF AIR NEW ZEALAND IS….
"We will strive to be number one in every market we serve by creating a workplace where teams are committed to our customers in a distinctively New Zealand way, resulting in superior industry returns." (Source: http://www.airnewzealand.co.nz/corporate-profile)
WHAT MY COMPANY DOES:
Air New Zealand Limited is the national airline and flag carrier of New Zealand, which is based in Auckland. The airline caters to 25 domestic and international scheduled passenger flights across 15 countries in all continents except Africa and South America.
The airline has been a member of the Star Alliance since 1999.
The airline started in 1940 as Tasman Empire Airways Limited (TEAL), which was a flying boat company operating trans-Tasman flights between New Zealand and Australia. TEAL was taken over by the New Zealand government in 1965, where it was renamed Air New Zealand. The airline mainly served international routes until 1978, when the government merged it and the domestic-orientated New Zealand National Airways Corporation (NAC) into a single airline under the Air New Zealand name. The airline carries 11.7 million passengers annually as of 2008.
Network & Fleet:
Air New Zealand's route network focuses on Australasia and the South Pacific, with long-haul services to East Asia, North America and the United Kingdom.
The airline's main hub is Auckland Airport.
Air New Zealand currently operates an international long-haul fleet consisting of Boeing 777s, with also Boeing 767-300 and Boeing 787-9 Dreamliner aircraft. Airbus A320 aircraft operate on short-haul international routes such as to Australia, and on domestic routes alongside Boeing 737-300 airliners. Air New Zealand's has regional subsidiaries, which are: Air Nelson, Eagle Airways, and Mount Cook Airline. These airlines operate additional short-haul New Zealand domestic services using turboprop aircraft.
Awards:
Air New Zealand was awarded Airline of the Year in 2010 and 2012 by the Air Transport World Global Airline Awards.
IN THE NEWS:
Recent news surrounding Air New Zealand relates to aviation safety due to the recent tragedies in the industry. Such as:Air New Zealand Changes Cockpit Rules
Air New Zealand Joins Cockpit Response To Germanwings Tragedy
Click here for the latest news headlines on Air New Zealand: Air New Zealand - Google News
Subscribe to:
Posts (Atom)