‫ﻣﻘﺮر‬

‫أﺳﺎﺳﻴﺎت اﻟﻤﺤﺎﺳﺒﺔ ﺑﺎﻟﻠﻐﺔ اﻹﻧﺠﻠﻴﺰﻳﺔ‬

‫ﺑﺮﻧﺎﻣﺞ اﻟﻤﺤﺎﺳﺒﻴﻦ اﻟﻤﻤﻴﺰﻳﻦ‬
‫اﻟﺪﻓﻌﺔ اﻟﺮاﺑﻌﺔ‬
 Accounting Principles

2
 Abdulaziz Al Mazrou
- Certified Public Accountant CPA
SOCPA
- Master in Accounting
- More than 10 years experience
in Accounting and Treasury

3
 Agenda

1 - Introduction

- Accounting Vocabulary 2
3 - Main Accounting Principles

- Practice 1 : Excel Sheet 4

5 - Financial Information

- Case Study : Investor Decision 6

7 - Other Information

- Double Entry Theory 8

9 - Accounting Equation

- Practice 2 : Excel Sheet 10

4
 Accounting

Decisions
Economic event

Analyzing

Recording
Users
Posting

Classifying

Financial Statements

5
 Accounting Cycle

Actual transaction during the period Period closing Steps

Analyze Record in Post in Prepare Adjusted

Adjustment Financial
economic the Journal General Trial Trial
Entries Statements
event entries Ledger Balance Balance

6
 Managerial Accounting vs Financial Accounting
Managerial Accounting - CMA
-- Internal users – Employees and Managers
-- Optional Reporting
-- ADHOC analysis and reporting
- Break even point analysis
- Costing analysis

Financial Accounting - CPA

-- External users – Investors, Suppliers, Customers, ZATCA, Governments etc.
-- Mandatory Reporting
-- Fixed reporting IFRS
- Formal Financial Statements

7
 Accounting Vocabulary Exercise

- Please refer to Excel file

-- Accounting Vocabulary Sheet

- Test your knowledge and translate to Arabic

- Work as Group and get Started!!

8
 Accounting Principles
Historical cost principle
Record asset at cost
Matching Principle
Match expenses to relative revenue for the period (Revenue Vs Expenses)
Accrual Basis Principle
Record revenue at same period of occurrence and Expenses at same period of occurrence
Revenue Recognition Principle
Recognize revenue when service is delivered to customer even if it is still cash not collected

9
 Practice questions
Please refer to excel file
Practice 1

10
 Characteristic of financial information
Measurable
Have a specific value and hence we are able to measure it accurately
Accuracy
Financial reporting is free of errors or mistakes.
Timely
Financial information is available in the right time
Comparable
Financial information can be compared across companies within
the same sector.

11
 Case Study: Investor Decision

Investor is planning to invest in stock market for a long

term investment plan, in order to get a return.

Company A
Revenue SAR 10B
Cost SAR 9.8B
Net profit SAR 200M
Company B
Revenue SAR 5B *Financial information is not enough to
accurately evaluate the possible future
Cost SAR 4.5B
position of the company
Net profit SAR 500M

12
 Company’s Annual Report
- Most of the large corporations issue Annual Report
- Annual Report is not necessary to be mandatory however large
corporation issue annual report to explain and express not only
financial information but also non financial information.
- Financial statement such as Income statement and Balance
sheet are part of annual report
- Annual report contain also
-- Company’s future plans and programs
-- Company’s policies
-- Sustainability Reporting

13
 Double Entry Theory

Debit Credit

Account A 10,000

Account B 10,000

14
 Accounting Equation

Asset = Liabilities + Owner’s Equity

Credit Debit

Debit
Credit

Expenses Revenue

15
 References

https://www.accountingtools.com/articles/the-accounting-equation

https://www.accountingtools.com/articles/basics-of-accounting.html

https://www.accountingtools.com/articles/financial-accounting-basics

16