The essence of the accounting

Accrual

These are amounts due to the business from a lender, which are unpaid at the end of the accounting season.
Treat money like an asset of the business, not liability, as a loan might be. This is done for this purpose to understand this better only.
Imagine you are an enterprenuer, and you borrowed funds from the bank
Your company has money somewhere
The bank owes you (loan)
hence the money is still not in your possession.
By thoses qualities it becomes an asset

Prepayment

This is income in advance of the accounting period it relates to. So an external body brought money into the organization, creating some form of money (capital/loan) coming in.
I am aware this is prepayments but to serve the quality of ‘income’, payments into the enterprise, not out, is what we are considering.
The bank loaned you money in advance
You owe loan
By that it becomes a liability

Accrual

This is money due to the business, which is unpaid at the end of the accounting season.
Imagine you are a business person, and a debtor did not pay you on time
The business does not have money
you will be in debt due to inability to meet your own obligation hence creates a liability

Prepayment

The amount owed to the business has been paid in advance of the accounting period it relates to. So an external body brought money into the organization, which becomes revenue to it.
The debtor paid you in advance
Your business has money
By that it becomes an asset

3. 
   Cost of capital is the minimum rate of return that a business must earn before generating value. Before a business can turn a profit, it must at least generate sufficient income to cover the cost of the capital it uses to fund its operations. This consists of both the cost of debt and the cost of equity used for financing a business. A company’s cost of capital depends, to a large extent, on the type of financing the company chooses to rely on – its capital structure. The company may rely either solely on equity or solely on debt or use a combination of the two.
   

The choice of financing makes the cost of capital a crucial variable for every company, as it will determine its capital structure. Companies look for the optimal mix of financing that provides adequate funding and minimizes the cost of capital.
In addition, investors use the cost of capital as one of the financial metrics they consider in evaluating companies as potential investments. The cost of capital figure is also important because it is used as the discount rate for the company’s free cash flows in the DCF analysis model.
Ticket № 8
8.1A business transaction is a financial transaction between two or more parties that involves the exchange of goods, money, or services. To engage in a business transaction, the business exchange must be measurable in monetary value so it can be recorded for accounting purposes. Business transactions will affect the financials of the company involved.
Business transactions can be as simple as a cash purchase or as complex as a long-term service contract . To be considered a business transaction, the following characteristics must be present:
The transaction can be measured in monetary terms
The transaction occurs between the business and a third party
The transaction is on behalf of the business entity, and it is not for an individual purpose
The transaction is recorded by authorized legitimate documents like an invoice, sale order, receipt, etc. that supports the transaction
A business transaction can occur between two parties for mutual benefits or between a business entity and a customer, such as a store and a person purchasing an item from the store.
8.2The standard requires a complete set of financial statements to comprise a statement of financial position, a statement of profit or loss and other comprehensive income, a statement of changes in equity and a statement of cash flows.
8.3 The two fundamental qualitative characteristics of financial reports are relevance and faithful representation. The four enhancing qualitative characteristics are comparability, verifiability, timeliness and understandability.
Relevance
The characteristic of relevance implies that the information should have predictive and confirmatory value for users in making and evaluating economic decisions. The relevance of information is affected by its nature and materiality. Information is material if omitting it or misstating it could influence decision making. A financial report should include all information which is material to a particular entity.
Faithful representation
The characteristic of faithful representation implies that financial information faithfully represents the phenomena it purports to represent. This depiction implies that the financial information is complete, neutral and free from error.
Ticket №9
9.1Advantages of a corporation include personal liability protection, business security and continuity, and easier access to capital. Disadvantages of a corporation include it being time-consuming and subject to double taxation, as well as having rigid formalities and protocols to follow.
There are several advantages to becoming a corporation, including the limited personal liability, easy transfer of ownership, business continuity, better access to capital and (depending on the corporation structure) occasional tax benefits. The legal structure of your corporation and the benefits you receive from it will depend on the specific setup of your business.
A corporation is not for everyone, and it could end up costing you more time and money than it’s worth. Before becoming a corporation, you should be aware of these potential disadvantages: There is a lengthy application process, you must follow rigid formalities and protocols, it can be expensive, and you may be double taxed (depending on your corporation structure).
9/2
The term inventory refers to the raw materials used in production as well as the goods produced that are available for sale. A company's inventory represents one of the most important assets it has because the turnover of inventory represents one of the primary sources of revenue generation and subsequent earnings for the company's shareholders. There are three types of inventory, including raw materials, work-in-progress, and finished goods. It is categorized as a current asset on a company's balance sheet
Inventory is a very important asset for any company. It is defined as the array of goods used in production or finished goods held by a company during its normal course of business. There are three general categories of inventory, including raw materials (any supplies that are used to produce finished goods), work-in-progress (WIP), and finished goods or those that are ready for sale.
9/3
The non-current assets of a company are integral to its function, so it's important to understand what exactly they are. Non-current assets represent a company's long-term investments, where a business won't gain the full value of the asset during the accounting year. Non-current assets also include items that don't have an inherent value or don't have a fixed expiration.
Ticket № 4
4.1
TABLE OF CONTENTS
CORPORATE FINANCE CORPORATE FINANCE BASICS
Capital Structure Definition, Types, Importance, and Examples
By ALICIA TUOVILA Updated December 14, 2022
Reviewed by MARGARET JAMES
Fact checked by PETE RATHBURN
Capital Structure
Investopedia / Matthew Collins

What Is Capital Structure?

Capital structure is the particular combination of debt and equity used by a company to finance its overall operations and growth.

Equity capital arises from ownership shares in a company and claims to its future cash flows and profits. Debt comes in the form of bond issues or loans, while equity may come in the form of common stock, preferred stock, or retained earnings. Short-term debt is also considered to be part of the capital structure.

KEY TAKEAWAYS

Capital structure is how a company funds its overall operations and growth.
Debt consists of borrowed money that is due back to the lender, commonly with interest expense.
Equity consists of ownership rights in the company, without the need to pay back any investment.
The debt-to-equity (D/E) ratio is useful in determining the riskiness of a company's borrowing practices.
4.2 A cash flow statement summarizes the amount of cash and cash equivalents entering and leaving a company. The CFS highlights a company's cash management, including how well it generates cash. This financial statement complements the balance sheet and the income statement.
A cash flow statement is a financial statement that provides aggregate data regarding all cash inflows that a company receives from its ongoing operations and external investment sources. It also includes all cash outflows that pay for business activities and investments during a given period.

A company’s financial statements offer investors and analysts a portrait of all the transactions that go through the business, where every transaction contributes to its success. The cash flow statement is believed to be the most intuitive of all the financial statements because it follows the cash made by the business in three main ways: through operations, investment, and financing. The sum of these three segments is called net cash flow.

These three different sections of the cash flow statement can help investors determine the value of a company’s stock or the company as a whole.

4.3 In business, a stakeholder is any individual, group, or party that has an interest in an organization and the outcomes of its actions. Common examples of stakeholders include employees, customers, shareholders, suppliers, communities, and governments. Different stakeholders have different interests, and companies often face trade-offs in trying to please all of them
Types of Stakeholders
This guide will analyze the most common types of stakeholders and look at the unique needs that each of them typically has. The goal is to put yourself in the shoes of each type of stakeholder and see things from their point of view.

#1 Customers

#2 Employees
#3 Investors
#4 Suppliers and Vendors
#5 Communities
#6 Governments
Ticket № 3

1. 
   Accounting concepts are ideas, assumptions and conditions based on which a business entity records its financial transactions and organises its bookkeeping. It helps a business interpret and integrate a financial transaction into the accounting process.
   

#1 – Entity Concept
#2 – Money Measurement Concept
#3 – Periodicity Concept
#4 – Accrual Concept
#5 – Matching Concept
#6 – Going Concern Concept
#7 – Cost Concept
#8 – Realization Concept
#9 – Dual Aspect Concept
#10 – Conservatism
#11 – Consistency
#12 – Materiality
Objectives of Accounting Concepts
The main objective is to achieve uniformity and consistency in preparing and maintaining financial statements
.
It acts as the underlying principle that assists accountants in preparing and maintaining business records.
It aims to achieve a common understanding of rules or assumptions to be followed by all types of entities, thereby facilitating comprehensive and comparable financial information
3/2
Company management, analysts, and investors can use a company's inventory turnover to determine how many times it sells its products over a certain period of time. Inventory turnover can indicate whether a company has too much or too little inventory on hand.
Types of Inventory
Remember that inventory is generally categorized as raw materials, work-in-progress, and finished goods. The IRS also classifies merchandise and supplies as additional categories of inventory
3/3
Accounts payable (AP) is money owed by a business to its suppliers shown as a liability on a company's balance sheet. It is distinct from notes payable liabilities, which are debts created by formal legal instrument documents.[1] An accounts payable department's main responsibility is to process and review transactions between the company and its suppliers and to make sure that all outstanding invoices from their suppliers are approved, processed, and paid. Processing an invoice includes recording important data from the invoice and inputting it into the company's financial, or bookkeeping, system. After this is accomplished, the invoices must go through the company's respective business process in order to be paid.