{"id":1677,"date":"2025-09-28T14:30:31","date_gmt":"2025-09-28T13:30:31","guid":{"rendered":"https:\/\/ecourse.uk\/8135\/?p=1677"},"modified":"2025-09-28T14:06:00","modified_gmt":"2025-09-28T13:06:00","slug":"week-2b-5-core-double-entry-the-primary-financial-statements-and-financial-decisions","status":"publish","type":"post","link":"https:\/\/ecourse.uk\/8135\/?p=1677","title":{"rendered":"Week 2b [5] [CORE]: Double Entry, the Primary Financial Statements and Financial Decisions"},"content":{"rendered":"<p><a href=\"https:\/\/en.wikipedia.org\/wiki\/Luca_Pacioli\" target=\"_blank\" rel=\"noopener\"><strong style=\"color: #3366ff;\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-1682 \" src=\"https:\/\/ecourse.uk\/8135\/wp-content\/uploads\/2023\/09\/luca_pacioli-e1695827999824.jpg\" alt=\"\" width=\"608\" height=\"440\" srcset=\"https:\/\/ecourse.uk\/8135\/wp-content\/uploads\/2023\/09\/luca_pacioli-e1695827999824.jpg 1500w, https:\/\/ecourse.uk\/8135\/wp-content\/uploads\/2023\/09\/luca_pacioli-e1695827999824-300x217.jpg 300w, https:\/\/ecourse.uk\/8135\/wp-content\/uploads\/2023\/09\/luca_pacioli-e1695827999824-768x556.jpg 768w, https:\/\/ecourse.uk\/8135\/wp-content\/uploads\/2023\/09\/luca_pacioli-e1695827999824-1024x741.jpg 1024w\" sizes=\"auto, (max-width: 608px) 100vw, 608px\" \/><\/strong><\/a><br \/>\n<em>Luca Pacioli, a Venetian mathematician was the first to describe in print the double entry system used by Venetian merchants to record transactions. Click picture for more information.<\/em><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/ecourse.uk\/8135\/?p=1677\/#Recording_transations_%E2%80%93_double_entry_and_the_accounting_system\" >Recording transations &#8211; double entry and the accounting system<\/a><ul class='ez-toc-list-level-5' ><li class='ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/ecourse.uk\/8135\/?p=1677\/#Link_to_learning_materials_pdf_notes\" >Link to learning materials (pdf notes)<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/ecourse.uk\/8135\/?p=1677\/#Financial_reporting_and_decision_making\" >Financial reporting and decision making<\/a><ul class='ez-toc-list-level-5' ><li class='ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/ecourse.uk\/8135\/?p=1677\/#Link_to_learning_materials_pdf_notes-2\" >Link to learning materials (pdf notes)<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h4><span class=\"ez-toc-section\" id=\"Recording_transations_%E2%80%93_double_entry_and_the_accounting_system\"><\/span><strong style=\"color: #3366ff;\">Recording transations &#8211; double entry and the accounting system<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>Last week we looked at business transactions and how they affected the assets, liabilities and capital of a business. Businesses need a system for recording transactions as they occur. That system is based on <em><strong>double entry bookkeeping<\/strong>. <\/em>Bookkeeping and the accounting system are introduced in this section.<\/p>\n<h5><span class=\"ez-toc-section\" id=\"Link_to_learning_materials_pdf_notes\"><\/span><a href=\"http:\/\/ecourse.co.uk\/materials\/doubleentry\/doubleentry.pdf\" target=\"_blank\" rel=\"noopener\"><strong>Link to learning materials<\/strong><\/a> (pdf notes)<span class=\"ez-toc-section-end\"><\/span><\/h5>\n<hr \/>\n<h4><span class=\"ez-toc-section\" id=\"Financial_reporting_and_decision_making\"><\/span><span style=\"color: #3366ff;\"><strong>Financial reporting and decision making<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>The objective of financial reporting is to present information to users. Users include owners, creditors and other external users.<\/p>\n<p>Users use this information to make decisions. Decisions can be:<\/p>\n<p>a)\u00a0<strong>stewardship decisions<\/strong>, e.g. is the business being run well, is everything above board, and are there systems in place to make sure that all money and transactions are properly recorded and accounted for, and<\/p>\n<p>b)\u00a0<strong>economic decisions<\/strong>, e.g. how well has the business performed, and what are its prospects.<\/p>\n<p>The end result of financial reporting is three principal financial statements:<\/p>\n<ul>\n<li>The\u00a0<strong>cash flow statement<\/strong>\u00a0&#8211; basically a summary of the entity&#8217;s cash and bank accounts for a reporting period (usually a year)<\/li>\n<li>The\u00a0<strong>statement of financial position<\/strong>\u00a0[<em>or\u00a0<\/em>balance sheet] &#8211; \u00a0a summary of the assets, liabilities and equity of the business as at the end of the period.<\/li>\n<li>The\u00a0<strong>income statement<\/strong>\u00a0[<em>or\u00a0<\/em>profit and loss account] &#8211; a performance statement summarising income, expenses and profit for the period.<\/li>\n<\/ul>\n<p>We will look at the fundamental structure of these statements today. A lot of concepts will be covered, and we will need to cover things quite fast to get through everything. We&#8217;ll have a look at Tesco&#8217;s latest financial statements. At this stage focus on the &#8216;big picture&#8217; and don&#8217;t get bogged down in the detail.<\/p>\n<h5><span class=\"ez-toc-section\" id=\"Link_to_learning_materials_pdf_notes-2\"><\/span><a href=\"http:\/\/ecourse.co.uk\/media\/tesco\/presentation.pdf\" target=\"_blank\" rel=\"noopener\"><strong>Link to learning materials<\/strong><\/a> (pdf notes)<span class=\"ez-toc-section-end\"><\/span><\/h5>\n<hr \/>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Luca Pacioli, a Venetian mathematician was the first to describe in print the double entry system used by Venetian merchants to record transactions. Click picture for more information. Recording transations &#8211; double entry and the accounting system Last week we looked at business transactions and how they affected the assets, liabilities and capital of a [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[3],"tags":[],"class_list":["post-1677","post","type-post","status-publish","format-standard","hentry","category-lectures"],"_links":{"self":[{"href":"https:\/\/ecourse.uk\/8135\/index.php?rest_route=\/wp\/v2\/posts\/1677","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ecourse.uk\/8135\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ecourse.uk\/8135\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ecourse.uk\/8135\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ecourse.uk\/8135\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1677"}],"version-history":[{"count":5,"href":"https:\/\/ecourse.uk\/8135\/index.php?rest_route=\/wp\/v2\/posts\/1677\/revisions"}],"predecessor-version":[{"id":1693,"href":"https:\/\/ecourse.uk\/8135\/index.php?rest_route=\/wp\/v2\/posts\/1677\/revisions\/1693"}],"wp:attachment":[{"href":"https:\/\/ecourse.uk\/8135\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1677"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ecourse.uk\/8135\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1677"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ecourse.uk\/8135\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1677"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}