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Business Accounting: The Expenditure Cycle

Audience

Managers, prospective managers, and any other employees seeking competency in the area of accounting

Prerequisites

A basic understanding of the accounting function

Course Aim

To provide students with an overview of the expenditure cycle and the role of accounting within it

Learning Objectives

Discuss operating, investing, and financing activities. Briefly introduce the revenue and conversion cycles. Define the expenditure cycle. Describe the importance of merchandise accounting and inventory control for merchandising companies. Distinguish between periodic and perpetual inventory systems. Explain the four primary methods of tracking inventory costs. Describe how operating events are reported in various financial statements. Outline the impact of errors in financial statements and inventory reports. Identify payroll taxes that must be paid by employers and employees. Describe how accounting events relating to payroll and payroll taxes are recorded.

Topics Covered

Business Activities - What are business activities? - The expenditure cycle - The revenue and conversion cycles introduced - Hands-on: Arranging steps in the revenue and conversion cycles Fundamentals of the Expenditure Cycle - Inventory and expenditure - Accounting and the acquisition of inventory Cost Flow and Reports - Cost flow assumptions - Reporting operating events - Internal reports and errors - Payroll and payroll taxes - Hands-on: Recording payroll-related events