Flowcharts

Glossary of Formulas used in Accounting

Equity = Assets – Liabilities

Assets = Equity + Liabilities

Assets = Equity + (Revenue – Expenses) + Liabilities

Or (if we ‘add’ Expenses to each side)

Assets + Expenses = Equity + Revenue + Liabilities

Dividends (d) = Operating cash flow (C) – Capital outlays (I) + Net cash flow from debt owners (F) that is, d = C – I + F

Economic profit = (RNOA – cost of capital) × NOA Where, RNOA = OI/NOA

RNOA = PM x ATO
Where, PM = OI/Sales and ATO = Sales/NOA

Profit margin (PM) as:
PM = OI/Sales
Where OI = operating income after tax

Asset turnover (ATO)
ATO = Sales/NOA Where NOA = net operating assets

Overhead absorption rate would be calculated as:

Total overheads of a production department / Level of activity
Cost-volume-profit analysis
y = f(x)
Where y = the cost of the venue
x = the number of tickets sold

Production + Opening inventory = Sales + Closing inventory

Contribution margin (CM) is the difference between sales revenue (S) and variable costs (VC):

Contribution Margin = Sales – Variable Costs
CM = S – VC

The accounting rate of return (ARR) can be calculated as follows:

ARR (%) = (Average net profit /Initial investment) x 100

Where an investment is expected to provide constant cash flow each year, the payback period can be calculated as follows:

Payback period = Initial investment / Cash flow

Glossary - Acronyms used in Accounting

GLOSSARY OF ACRONYMS
AASB - Australian Accounting Standards Board
ABR - Australian Business Register
ABN - Australian Business Number
A/C - Account
AS - Activity Statement
ASIC - Australian Securities and Investment Commission
ATI - Adjusted Taxable Income
ATO - Australian Taxation Office
BAS - Business Activity Statement
B/S - Balance Sheet
BSt - Bank Statement
CA - Chartered Accountant
C@B - Cash at Bank
C/F - Carry Forward
CFY - Current Financial Year
CGT - Capital Gain Tax
CPA - Certified Practicing Accountant
CWDV - Closing Written Down Value
DCL - Depreciation Car Limit
DRP - Dividend Reinvestment Plan/Scheme
EFT - Electronic Funds Transfer
ELD - Electronic Lodgement Declaration
ELS - Electronic Lodgement System
ETP - Employment Termination Payment
ETR - Education Tax Refund
FAO - Family Assistance Office
FAQ - Frequently Asked Questions
FBT - Fringe Benefit Tax
FY - Financial Year
GST - Goods and Services Tax
HECS - Higher Education Contribution Scheme
HELP - Higher Education Loan Programme
IAS - Instalment Activity Statement
ICAA - The Institute of Chartered Accountants Australia
ITAA - Income Tax Assessment Act
ITC - Input Tax Credits
ITR - Income Tax Return
KPI - Key Performance Indicator
LCT - Luxury Car Tax
LITO - Low Income Tax Offset
LFY - Last Financial Year
MAWTO - Mature Age Worker Tax Offset
M/L - Medicare Levy
MV - Market Value
M/V - Motor Vehicle
NIA - National Institute of Accountants
NOA - Notice of Assessment
NTAA - The National Tax and Accountants’ Association
OWDV - Opening Written Down Value
P&E - Plant and Equipment
P&L - Profit and Loss
PAYG-I - Pay As You Go Instalment
PAYG-W - Pay As You Go Withholding
PSB - Personal Services Business
PSE - Personal Services Entity
PSI - Personal Services Income
R&M - Repairs and Maintenance
RFB - Reportable Fringe Benefits
SATO - Senior Australian Tax Offset
SBDC - Small Business Development Corporation
SBE - Small Business Entity
SBR - Standard Business Reporting
SG - Superannuation Guarantee
SISA - Superannuation Industry Supervision Act
SISR - Superannuation Industry Supervision Regulations
SMSF - Self-managed Superannuation Fund
STS - Simplified Tax System
TAP - Tax Agent Portal
TD - Taxation Determination
TFN - Tax File Number
TIA - Taxation Institute of Australia
TPB - Tax Practitioners’ Board
TR - Taxation Ruling
WET - Wine Equalisation Tax
Y/E - Year End
YTD - Year to Date