Notes, summaries, assignments, exams, and problems for Economy

Annual Accounts

A. Model Structure and the Annual Accounts

These should be prepared in accordance with the Commercial Code, the Revised Corporate Law, and the Law of Limited Liability Companies as provided in the General Accounting Plan.

They should be formulated within a maximum of three months after the end of the fiscal year.

The General Accounting Plan provides two different models of annual accounts:

• Normal
• Abbreviated

Abbreviated annual accounts facilitate this requirement for individual entrepreneurs and small and medium-sized corporate businesses.

B. Depositing Accounts in the Commercial Register

Once developed, the annual accounts may be filed and advertised in the Commercial Register.

Sole proprietors are not required to deposit their annual... Continue reading "Understanding Annual Accounts: Structure, Filing & Components" »

Brand: Definition and Importance

A brand is a name, term, symbol, design, or a combination thereof, which aims to identify the goods or services of one seller or group of sellers and differentiate them from competitors. The brand is a fundamental aspect of a product strategy; it is the formal identification of the product, in order to differentiate it from the competition. It protects customers and vendors from competitors who want to market products that appear equal.

Elements of a Brand

• Brand Name: The part of a brand that can be spoken.
• Brand Mark: The emblem distinguishes a brand, product, or company and is recognized by sight.
• Logo: Consists of numbers or abbreviations to facilitate typesetting.

Key Features of a Strong Brand

• Easy to learn and

Criteria for Classifying Financial Sources

Companies require financial resources both during their inception and throughout their operational activities to facilitate investments. These financial sources can be classified based on ownership, time, and origin.

Classification Based on Ownership

• Self-Financing: Capital provided by partners and retained earnings (reserves).
• External Financing: Resources obtained from external sources, typically debt.

Classification Based on Time

• Fixed Liabilities: Long-term obligations.
• Current Liabilities: Short-term obligations.
• Permanent Capital Resources: Resources that remain within the company for the long term.
• Short-Term Financial Resources: Resources that remain within the company for the short term.

Classification

Income

The income figure is derived by multiplying the quantity sold by its market price. This figure is set by the free market as fluctuations in supply and demand occur. To increase revenue is to increase the product quantity sold.

This depends on the quality and the evaluation of the editorial graphics and their ease of communication.

• Sales to the Nth: This is the value of all copies sold through the various channels of distribution releases, with the added value of not being acquired by the public loose on the premises of the publication itself. The selling price is fixed independently.
• Subscriptions: These are made with all copies of a publication, previously sent to a recipient, upon request, and you pay in advance the asking price, according

Financial Ratio Analysis

Financial Ratios: What Are They?

• A value based on common financial metrics.
• The result of dividing one financial statement item by another, facilitating interpretation and comparison.

Liquidity Ratios

Ability to meet short-term obligations.

Current Ratio = Current Assets / Current Liabilities

Measure: Ability to pay short-term debts.

Interpretation: The higher the ratio, the better the liquidity position, although it may represent some short-term debt or excess assets.

Quick Ratio = (Current Assets - Inventory) / Current Liabilities

Measure: Ability to pay quickly in the short term.

Interpretation: The higher the ratio, the better the liquidity position, although it may represent some short-term borrowing or excess assets.

Activity

Understanding Product Distribution

A distribution policy ensures that a product is available at the right place and time for consumers to purchase it. Distribution encompasses all processes that move a product from the company to the consumer. This creates what is known as "place and time utility." The process that a product follows from the production chain until it reaches the customer's hands is as follows:

1. Storage: Since products are not always sold immediately after manufacturing, companies must store them. Efforts should be made to minimize this period to reduce storage costs.
2. Physical Distribution: This involves the transportation or transfer of the product. Customers must receive the product in perfect condition and within the stipulated

What is Corporate Finance?

All activities related to obtaining resources under favorable conditions and their effective implementation to achieve company goals.

• Obtaining funds from advantageous sources, evaluating beneficial resources.
• Applying resources effectively.
• Financial planning: anticipating and providing resources.
• Financial control: monitoring resource performance.

Profit vs. Wealth Maximization

• Profit Maximization: Short-term focus on eliminating waste, proper maintenance, and quality raw materials.
• Wealth Maximization: Long-term focus on increasing share price and company value.

Conflicts Between Owners and Managers

• Managers have contractual wages, while owners have residual pay, leading to conflicts of interest.
• Owners may prefer higher-

IAS 11: Construction Contract Accounting

Scope

This Standard applies to accounting for construction contracts in the financial statements of contractors.

A construction contract is specifically negotiated for the production of an asset or group of assets that are closely interrelated or interdependent in terms of design, technology, and function, or in their ultimate destination or use.

A fixed price contract is a construction contract where the contractor agrees to a fixed price or a fixed amount per unit of output. In some cases, these prices are subject to review clauses if costs increase.

A cost plus contract is a construction contract where the contractor is reimbursed for costs defined in the contract, plus a percentage of those costs or a... Continue reading "IAS 11: Understanding Construction Contract Accounting" »

Harmful Tax Competition

Countries try to attract as much wealth as possible to their jurisdiction to increase total revenue without increasing the tax burden on each unit of wealth. When they attract wealth, states find that some types are more responsive than others to tax incentives. Some types of wealth are relatively insensitive to them, while others are very sensitive. Following this idea, states concentrate their attraction efforts on those types of wealth that are more sensitive to tax incentives because they have more mobility.

Tax competition is harmful when a state attracts wealth, and it causes harm to other states that is bigger than the benefit it obtains.

Perspectives of Analysis of Harmful Tax Effects

1. Economic Efficiency: Resources

Tema 2: Financial Statement Analysis

Section 1: Merchandise and Bank Transactions

Merchandise and VAT

• Merchandise: $2,500,000
• VAT Credit: $475,000
• Total: $2,975,000 (1.5 points)

Bank and Receivables

• Bank: $2,499,000 ( ($4,200,000 + $798,000) / 2 )
• Accounts Receivable: $2,648,940
• Cost of Sales: $3,290,000 ( ($261,800 / 1.19) x 7 + $250,000 x 7 ) (3 points)

Revenue and Expenses

• Merchandise: $3,290,000
• Revenue from Sales: $4,200,000 ($300,000 x 14)
• VAT Debit: $798,000 ($4,200,000 x 0.19)
• Interest Earned: $149,940 ($2,499,000 x 0.02 x 3)

Section 2: Additional Transactions

Merchandise and Sales

• Merchandise: $220,000
• Revenue from Sales: $300,000
• VAT Debit: $57,000
• Total: $357,000 (2 points)
• Cost of Sales: $220,000

Repair Expenses

• Repair Expense: $10,000 (1.5 points)
• Units: