Understanding Key Accounting Concepts and Financial Statements

Key Accounting Concepts and Financial Statements

What are Circulating Assets?

Current Assets: These are items representing assets or securities resulting in the permanent conversion of the commercial or production cycle dedicated to the company. They represent availability, goods that may become available in the normal course of business with a maximum of one year from the balance sheet date. Examples include cash, bank accounts, accounts receivable, customer or debtor sales letters receivable, merchandise

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Journal Entries and Accounting Scenarios Explained

Accounting Transactions

Initial Balances:

Box: 8,000, Bank: 53,000, Merchandise: 16,000, Effects C BC: 3,400, Clients: 14,000, Furniture: 8,000, Machinery: 10,000, Element Tran: 90,000, HP receivable: 7,000, SS Creditors Agency: 3,000, Suppliers: 17,500, C purposes P: 12,900, Creditors: 8,000, Capital: 254,000

Transaction 1

Supplier to deliver 1,500 € (+ tax) on account of a purchase within 15 days.

Journal Entry:

Advance to Supplier: 500 (407), TAX SOPRTE: 750, Bank: 1575 (572)

Transaction 2

Purchase

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Currency Depreciation, Interest Rates, and Exchange Rate Dynamics

Currency Depreciation and Current Account Effects

Question: “Sometimes currency depreciation does not improve the current account balance in a country.” Is this true or false? Explain your answer.

TRUE.

Normally, when a country’s currency depreciates, its exports tend to increase, and imports tend to decrease. This happens because the country’s goods and services become relatively cheaper for foreigners, enhancing its attractiveness and competitiveness.

An increase in exports leads to an increased

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IFRS and GAAP Accounting Principles: Questions and Answers

IFRS and GAAP Accounting Principles

T8

Which false? a) Receiv. include equity sec…

In record a factori trans.: d) IFRS all. partial

Under IFRS: a) the entry to record uncoll. GAAP.

Under IFRS, loans and receiv b) Amortiz c. adjust

T9

Which correct? b) IFRS per revalu (ex goodwill).

Res. and develop costs are: a) exp under GAAP.

IFRS allows. Which correct regarding? c) The journal entry to record a revaluation when the…

T10

The acc. bonds pay.: essent. same IFRS/GAAP

Which false? a) Under IFRS, c. liab.

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International Trade and Currency Markets

The Market Exchange Rates

Facilitating International Trade

Key elements for facilitating international trade:

  • Relative prices for currency conversion
  • A market for currency exchange
  • A system for managing exchange rates

Transactions are conducted within the currency exchange market.

1. The Currency Market

Currencies are traded for various reasons:

  • Profitability from buying and selling assets
  • Speculation on exchange rate fluctuations

Supply and demand determine the equilibrium price, known as the exchange rate.

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International Economics and Balance of Payments

International Economy and Balance of Payments

International Trade

Different nations lack resources and capabilities, such as climate conditions, mineral resources, and technology. Modern commerce consists of exchanging goods, services, and capital between countries. This trade facilitates specialization.

Commercial Policy and Protectionism

Commercial policy involves different types of international trade intervention. Measures can include tariffs, import quotas, and export subsidies.

Forms of Commercial

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