Current Liabilities

Current liabilities are obligations that are expected to be sufficient to be liquidated through use of current assets or the creation of other current liabilities. This concept includes:

•   Debt stemming from akisisi goods and services: accounts payable, payroll debt, tax debt, and others.
•    Billing unearned sebelu goods delivered or services are rendered as rental income that has not been produced or subscription revenues that have not been produced.
•      Other obligations that the liquidation will be carried out in the operating cycle as part of long-term bonds to be paid in the current period, or short-term liabilities from purchases of equipment.

 Current liabilities include items da non-trade notes and trade accounts payable, advances received from customers, and the current portion of long-term debt maturities. Income tax and other accrual items are classified separately, if material. Any obligation that is guaranteed for example, shares held as collateral for the notes payable should be fully explained in the notes to ensure that assets such securities can be identified

Non-Current Assets

Non-current assets

Non-current assets are assets that do not meet the definition of current assets. Assets include a variety of posts, as will be discussed in the following sections:

Long Term Investments, which is often called investment only, typically consisting of one of four types of investment the following:

•      Investment in securities, such as bonds, common stock, or long-term notes.

•     Investments in tangible fixed assets, which are currently used in operations such as land held for speculation

•        Investments set aside in special funds, such as the repayment of funds, pension funds or funds factory expansion. Cash surrender value of life insurance in this category.

•      Investment in subsidiaries or unconsolidated inflation

Long-term investments are usually held over the years. This post is usually presented in the balance sheet right under aktifa smoothly in a separate section called "investment". Many securities are adequately presented in the long-term investment, really ready to be marketed. However, these securities are not included in current assets, except if the goal is to convert them into cash in the short term in one year or one operating cycle, whichever is longer. Securities classified as available-for-sale securities should be reported at fair value. While the securities are classified as securities held-to-maturity are reported at amortized cost.

Balance Sheet

Balance is sometimes referred to as financial statements position, report assets, liabilities, shareholders equity firm business on a specific date. The financial statements provide information about the nature and amount of investments in enterprise resources, obligations to creditors, and owner's equity in the net resource. Thus, the balance sheet can help predict the amount, timing and uncertainty of future cash flows.

Uses balance
By providing information about assets, liabilities, and shareholders' equity, the balance sheet is the basis for calculating the rate of return and evaluate the company's capital structure. In this case, the balance can be used to analyze liquidity, solvency, and financial flexibility of the company.

Companies that have a lot of debt relatively more risky because the assets would be required to pay for its fixed obligations.
Liquidity and solvency affect the entity's financial flexibility, which measures a company's ability to take effective action to change the amount and timing of cash flows so it can respond to the needs and opportunities in unexpected ways.

Period Cost

Period costs are costs indirectly related to the acquisition or production of goods. Costs such as selling expenses and, under normal conditions, general and administrative expenses are not considered part of the cost Inventory
But conceptually, this burden is the cost of the product as well as the initial purchase price and transport costs. Then why these costs are not considered part of the cost of inventory? Selling expenses are generally considered to be more related to cost of goods sold rather than the inventory that has not sold. However, in most cases. Such other costs especially administrative expenses, is not related or indirectly related to the production process so that the allocation of such costs to cost of inventory will be the arbitrator.
The interest cost is the cost of other periods. Interest costs berhubungandenga preparation to be ready for sale inventory is usually charged when incurred. Advocates of this approach argue that the interest expense is the cost of financing. However, the parties argue that the interest expense incurred to finance activities related to the creation and the transport of supplies to the condition and location ready to sell an asset such as the cost of materials, labor, and overhead, and should therefore be capitalized.


FASB determined that the interest costs associated with the assets created for internal use or assets produced as a special project for sale or dilease should be capitalized. FASB emphasized that this particular project took a long time, large-scale spending, and the likelihood will involve significant interest expense. Interest costs associated with supplies that are routinely manufactured or produced in large qualities repeatedly should not be capitalized, because the benefits are not in accordance with the cost.

Product Cost

Production costs are costs attached to the inventory and recorded in the inventory account. These costs are directly related to the transfer of the goods to the buyer's site and modifiers to the condition that the goods are ready for sale. Expenses such as this covers the cost of transporting the goods purchased, other direct purchase costs, and labor costs as the production of other goods dikeluarka in the process when it is sold.
It also seemed appropriate to allocate part of any fees or expenses purchasing department purchasing, storage costs, and other costs incurred in inventory before being sold. However, because of the practical difficulties in allocating such costs and expenses, the items are usually not included in the valuation of inventory.

Cost of manufacturing companies include direct material costs, direct labor, and manufacturing overhead. Manufacturing overhead costs include indirect materials, indirect labor, and other costs such as depreciation, taxes, insurance, and electricity.

Inventory

INVENTORY

Inventory is assets items that had by company for sales of business operating , or goods will used or is consumed in make goods that be sold. Description and measure inventory need celerity. 

The cost charged to the goods and raw materials on hand but not yet reported as diverted to the production of raw material inventory.At any point in the process of sustainable production, there are a number of units that have not been processed completely. Cost of raw materials for products that have been made but not yet completed, plus the cost of direct labor applied specifically to these raw materials and overhead costs are allocated, is persediaaan in the process.Costs associated with products that have been completed but not yet sold by the end of fiscal period are reported as finished goods inventory.Inventory Control 

1. Perpetual System 
Perpetual inventory system continuously tracks changes inventory account, which all purchases and sales of goods are recorded directly kea kun supplies in the event. Accounting characteristics of the perpetual inventory system is:

•  Purchasing merchandise for sale or purchase of raw materials for the production debited to inventory and not to purchase.

•  The cost of transportation in, purchase returns and price reductions, sertadiskon purchases debited to the inventory account instead of separately.

•  Cost of goods sold are recognized for each sale by debiting the cost of sales account and crediting Inventory.

•  Inventory is a control account supported by a subsidiary ledger containing individual inventory records. Ledger showing the quantity and cost of each type of inventory that is in the hands.

2. Periodic System 
According to the periodic inventory system, hand inventory quantities specified, as implied by its name, periodically. All purchases of inventory during the accounting period are recorded by debiting the account of purchase. Total purchases account at the end of the accounting period is added to the cost of inventory on hand at beginning of period utuk determine the total cost of goods available for sale during the period.

Then the total cost of goods available for sale minus the ending inventory to determine the cost of goods sold. Note that the periodic dalamsistem, cost of goods sold is the residual amount that depends on the outcome of the end of the physical inventory count.
Physical inventory calculations required by the periodic inventory system is done once a year at the end of each year.

Recheivable

Receivables are claims of money, goods, or services to customers or other parties. For financial reporting purposes, accounts receivable are classified into current and non-current receivables. Current receivables are expected to be collectible within one year or selaa period. All other receivables are classified as non-current receivables. Receivables further classified as non-trade receivables and trade receivables.
 
Trade receivables are amounts owed ​​by customers for goods and services that have been provided as part of normal business operations. Usually classified as accounts receivable and notes receivable.
Accounts receivable is a verbal promise from the buyer to pay for goods or services sold. The note receivable is a written promise to pay a sum of money tetentu on a specific date in the future.
 
Non-trade receivables from various transactions. Some examples of non-trade receivables are:
1. advances to employees and staff
2. advances to subsidiaries
3. deposit to cover possible losses and damages
4. Deposit as a guarantee of the provision of services or payment
5. Dividends and interest receivable

Cash

Cash is the most liquid asset, a medium of exchange and a standard of measurement and the basis of accounting for all other items. In general, cash is classified as current assets. Cash consists of coins, paper money, and the funds available on deposit in the bank. The instrument can be negotiated as money orders, certified checks, cashier checks, personal checks, and bank weel also viewed as cash. Market funds, money market savings certificates, certificates of deposit, and similar types of deposits as well as the "letter or short-term commercial paper" that provides opportunities for small investors to earn higher interest rates, more appropriately classified as temporary investments rather than cash.

MANAGEMENT AND CONTROL
 Cash is the asset most susceptible to misuse. Management usually face two problems accounting for cash transactions:
 1. Appropriate controls must be established to ensure that no transactions are not recorded by authorized officers or employees.
2. Provide the information needed to manage its existing cash on hand and cash transactions correctly. To protect cash management and accuracy of accounting records for cash needed effective internal control over cash.

CASH REPORTING
The problems that connection with cash reporting :
1. Resstricted cash
2. Overdraft bank
3. Cash equivalents

Accounting Cycle

ACCOUNTING CYCLE

Accounting cycle is accounting procedure that generally used by company for record transaction and make financial statement.

Accounting cycle is transaction analysis and others events. Transaction as external event , can shape exchange where  both another accept and transfer something who has value , example purchase and sale goods and service.

General Journal

 Variety transactions who influence elements base bussines ( aktiva, passive, and ekuitas) is category and collected in accounts. General ledger is collection from almost accounts. In practice , transaction and certain events at the beginning doesn’t record in general ledger because one transaction will influence two accounts or more, where each other  accounts is found in different page  in general ledger. To handle this problem and record every transaction and event as complete in one place, used Journal. The simple shape of journal is transaction list or chronology that expression in debetand credit in certain accounts. That’s names general journal.

Trial Balance

            Trial balance is accounts list with balance in certain times. Usually , trial balance is made in last periode accounting . The purpose of trial balance for  proving similiarity mathematics of debet and credit after posting is did. Trial balance is used for detecting  errors  in make a general journal and posting  , and it’s used for arranging financial statement.