Basic Accounting &

Financial Reports

M ATA KU L I A H E KO N O M I P E R U S A H A A N
P E M B A N G K I TA N T E N AG A L I S T R I K

PROGRAM STUDI TEKNIK ELEKTRO

K E L O M P O K P E M I N A TA N M A N A J E M E N K E T E N A G A L I S T R I K A N D A N E N E R G I

F A K U L TA S T E K N I K
U N I V E R S I TAS I N D O N E S I A

OUR AGENDA
Introduction to Accounting

Basic Component of Accounting

Financial Reporting

Balance Sheet Structure

OUR AGENDA
Introduction to Accounting

Basic Component of Accounting

Financial Reporting

Balance Sheet Structure

What is the meaning of Accounting???

According to American Accounting Association

The process of identifying, measuring and communicating
information to permit judgment and decision by users of
accounts.
According to Suwarjono (2002)
The art of recording, classifying, summarizing, and reporting of
financial transactions that are occurring within a company

Accounting provides a way to collect economic information

and report it to the interested parties
Investors

to help determine whether to buy, hold, or sell his / her investment

in a particular company

Employees

to assess the company's ability to provide remuneration, retirement

benefits and employment opportunities.

Creditors

to decide whether the amount of the loan will be paid by the

company on the due date.

Suppliers

because of selling goods on credit, they need the information to

determine whether the company is able to pay for the credit paid

Government

to determine the amount of taxes that will be levied against a

company.

Society

to identify trends and developments prosperity of the company and

all its activities

OUR AGENDA
Introduction to Accounting

Basic Component of Accounting

Financial Reporting

Balance Sheet Structure

Accounting cycle is a series of accounting activities carried out

systematically starting from the accounting records until the closing
the bookkeeping
1 Analyzing the company's transactions and
Step 1
Analysis of
Business
Transaction

Step 9
PostClosing
Trial
Balance

Step 2
Make
Journal
Entries

3 Posting to the general ledger accounts

4

Step 3
Post to
General
Ledger

Step 8
Close
Accounts

Step 6
Adjusted
Trial
Balance

Step 5
Make
Adjusting
Entries

Step 4
Prepare
Trial
Balance

Prepare a trial balance will simply list the titles

of all of the accounts in thegeneral ledger that
have balances.
Make adjusting journal entries (if any)

6 Adjusted Trial Balance is a listing of all the

7
Step 7
Prepare
Financial
Statement

prepare bookkeeping evidence (transaction

documents)
Record account books to journals

account titles and balances contained in

thegeneral
ledger
after
the
adjusting
entriesfor an accounting periodhave been
posted
the accounts.
Prepareto Financial
Statements (Profit / Loss

Report, statement of changes in equity, or

retained earnings statement and balance
If the financial statement posted, so the
8 sheet).
Accounts is closed.
A post-closing trial balance is a trial balance
9 which is prepared after all of the temporary
accountsin the general ledgerhave been
closed. The temporary accounts include the
income statement accountsconsisting of
revenue, expense, gain, and loss accounts, the
summary accounts, and the few temporary
balance sheet accounts.

Basic Accounting Equation shows the balance between the amount

of the company's assets and total liabilities and total equity

Liabilities
Assets=
+Equity
Current Assets:
- Cash
- Account
Receivable
- Equipment
- Stocks, etc

Current Liabilities:
- Accounts Payable
- Bank Debt (Due
date < 1 year)
- Taxes, etc

Non-current
Assets:
- Building
- License, etc

Long Term Liabilities:

- Bank Debt (Due
date 1 year)
- Bond Debt, etc

- Owners
Shareholder
- Capital Stock.
- Retained
Earning, etc

Example from PT Indonesia Power

OUR AGENDA
Introduction to Accounting

Basic Component of Accounting

Financial Reporting

Balance Sheet Structure

Financial reports generated by a company must provide benefits to the

parties concerned with the financial statements. Accordingly, there are
several quality standards that must be met.
financial statements are presented in a way that is easy
to understand, with the assumption that the user has had
Can be
adequate knowledge of economic and business activity
Understand
financial information provided can meet the needs of
users and can assist users in evaluating the events of Relevan
the past and the future
The resulting financial information must be verifiable
by an independent verifier with proper
measurementsReability

Delivering information
to a consumer is a
very, very powerful
tool. Its giving them
more control in their
life.

financial statements can compare financial

Can be
statements between periods, so as to identify trends
Compared
in financial position and performance
financial information should be addressed to the
general purpose users

Neutral

the financial statements should be presented as early as

possible, so that it can be used as a basis for corporate
On Time
decision-making in accordance with the information it
needs time
financial information should present all the financial facts that Complete
are important, as well as presenting the facts in a way that will
not mislead readers

Financial
Reports

The financial statements are the end result of the activity of accounting
and summarize transaction data in a form that is useful for decisionmaking [1/2]
1

Income Statement
A report showing the
company or business
entity's ability to
generate profits in a
given period.

Income
Expense
Profit /
Loss

xxxxx
xxxxx
xxxxx

Statement of
Owners Equity

A report showing
changes in owner's
equity during a specific
time period.

Equity /
Retained
Earning in
early period

Balance Sheet
Financial statements
which describe the
financial condition of a
company at a specific
date

Assets
xxxxx

Profit / Loss
xxxx +/-

Current
Assets
Fixed Assets

Liabilities and
Equity
xxxxx
xxxxx
+

Liabilities:
Debt with A

xxxxx

xxxxx
Prive /
Payment of
dividen
Equity in end

Equites:
xxxxx -

Assets Total

xxxxx

As Equity

xxxxx-

The financial statements are the end result of the activity of

accounting and summarize transaction data in a form that is useful for
decision-making [2/2]
4

Statementof Cash
Flows
A report that describes
the cash inflows (cash
receipts) and outflows
(cash expenditures) in a
given period

Example from PT Indonesia

Power :

OUR AGENDA
Introduction to Accounting

Basic Component of Accounting

Financial Reporting

Balance Sheet Structure

Income Statement, Balance Sheet, and Statement of Cash Flows

dont stand alone, but interrelated in a system

Profit / Loss

Final
Balanc
e
Sheet

Initial
Balanc
e
Sheet

Cash

Complete Report is
consist of:
a. Initial Balance Sheet
b. Final Balance Sheet
c. Profit / Loss
Statement
d. Statement of Cash
Flows

Simply, the balance sheet is a direct illustration of the assets used by

company and funds related to such assets
Balance Sheet
Traditional Form
Asse
ts

Liabilities /
Equity

Everything
Which Are
Owned

The
Amount
Owed

by company

by company

Balance Sheet Five

Boxes Form
Asse
ts

Fixed Assets
(FA)

Liabilities /
Equity

OF
$450

$600
LTL

Current
Assets (CA)

$250
CL

$1000

$1000

$400

$300

$1000

$1000

Balance Sheet Structure [1/2]

1

Asse
ts

Fixed Assets
(FA)

$600
$600
Current
Assets (CA)

Liabilities /
Equity
OF
$450
LTL

2
$250
CL

$400

$300

$1000

$1000

Fixed Assets (All Long Term Assets):

a. Intangibles (goodwill, patent, license,
others)
b. Net Fixed Assets (land and buildings,
factory and transport equipment,
computer, office equipment, and the
others)
c. Investment (stocks)
Current Assets (All Short Term
Assets) :
a. Stock (Raw materials, goods being
processed, finished goods, maintenance
tools)
b. Accounts Receivable (trade debtors)
c. Cash (bank deposits in short term, liquid
securities, etc)
d. Others (all other short-term assets,
such as early payment to suppliers, the
number of corporate accounts, and nontrade transactions short-term)

Balance Sheet Structure [2/2]

3

Asse
ts

Fixed Assets
(FA)

$600
Current
Assets (CA)

Liabilities /
Equity

Owner
OF
Funding (OF)

$450
$450
Long Term
Liabilities
LTL
4
(LTL)
Curent
CL
Liabilities
(CL)

$400
$1000

$250
$250

5
$300
$300
$1000

4
5

Owner Funding :
a. Share Issued
b. Capital Reserves (surplus obtained
outside the normal trade-owned
shareholders)
c. Revenue Reserves (surplus obtained
All from
loanstrades)
in Long Term :
Mortgages, debentures, term loans,
bonds
All Liabilities in Short Term :
a. Account Payables (the amount of the
debt to suppliers from normal business
activities)
b. Short Term Loans (include overdraft
from Bank and all short term loans)
c. Others (debt payments, interest, taxes)