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101 Cards in this Set
- Front
- Back
Famously known as the language of business |
ACCOUNTING |
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Is a service activity. Its function is to provide quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions, in making reasoned choices among alterntive courses of action |
accounting/ Purpose of accounting |
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Anything tangible or intangible that capable of being owned or controlled to produce value that can be converted into cash |
Assets |
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Amount payable to providers of goods and services and providers of capital owners |
Liability |
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Also known as net asset or equity, refers to what is left to the owner after all the liabilities are settled |
Capital |
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Capital Affected by the following: |
Initial and additional contributions of owners Withdrawal made my owners Income Expenses |
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Refers to an increase in economic benefit during the accounting period in the form of an increase in asset or decrease in liability that results in increase in equity, other than contribution from owners |
Income |
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Are decrease in economic benefit during the accounting period in the form of decrease in asset or a increase in liability that result in the decrease in equity, other than distribution to owners |
Expenses |
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Is the income that a company receives from its normal business activities, usually from the sale of goods and services to customers. |
Revenue |
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A finacial benefit that is realized when the amount of revenue gained from a business activity exceeds the expenses, cost, and taxes needed to sustain the activity |
Profit |
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Is a decrease in net income that is outside the normal operations of the business |
Loss |
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Can result from a number of activities such as; sale of an asset for less than its carrying amount , the write down of assets, or a loss from a lawsuit |
Losses |
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Amount invested in long term assets which is not intended to be sold withi a year ,they are long term tangible assets |
Fixed asset |
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Amount invested in short term assets which is intended and rotated to earn revenue |
Current asset |
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Person who provide money or goods on credit to the business |
Creditors |
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Goods or money provided/sold on credit by the business |
Debt |
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Classification of accounts |
Personal account Real account Nominal account |
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Individual, firm, limited companies, local authorities, association |
Personal Account |
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"Debit- The receiver" "Credit- The giver" |
Personal account |
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Properties, assets |
Real account |
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Debit "what comes in" Credit " the Giver" |
Real Account |
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Expenses- lossess and income-gains |
Nominal Account |
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Debit "All the expenses & Losses" Credit " All income and gains" |
Nominal Acount |
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Financial Statement |
Statement of Comprehensive income Statement of Changes in Capital Statement of Financial Position Statement of Cash Flow Note to Financial Statement |
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Shows the operation of entity over a particular period of time |
Statement of Comprehensive income |
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shows the balance of the capital account at the beginning of the period, the changes that occurred during the period, and the ending balance as a result of such changes. Capital is affected by contributions and withdrawals of owners, income, and expenses.
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2. Statement of Changes in Capital |
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A Balance Sheet presents an entity's assets, liabilities, and capital as of a given point in time. This report shows the entity's financial position and condition, hence, also called ___ |
3. Statement of Financial Position |
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presents the beginning balance of cash, the changes that occurred during the period, and the cash balance at the end of the period as a result of the changes.
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4. Statement of Cash Flows |
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provide information in addition to those presented in the Balance Sheet, Income Statement, Statement of Changes in Equity, and Cash Flow Statement. |
5. Note to Financial Statement |
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TYPES OF ACCOUNTING
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Financial Accounting Managerial Accounting Cost Accounting Auditing Tax Accounting Accounting System Fiduciary Accounting Forensic Accounting |
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It is branch of applied economics is mainly focused on sustainable yield timber management, resource extraction and commodity production, excluding a wide range of forest values.
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Forest Economics |
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The ___ is viewed as a storable renewable resource and forestry as an investment with long rotation (production) periods and easily measurable stock growth. |
Forest |
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is to help determine a level and pattern of forest use which maximizes the present value of forest rent |
• The task of forestry economics |
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Characteristics of Forest |
• Extensive, visible and "open" resources • Renewable resources • Production capacity • Multiple use • Forests are both ecosystems and production systems • Geographical and biological varieties • Long rotation times |
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is a long term production cyclic process. |
Forest cultivation |
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Forest cultivation is a long term production cyclic process. |
Forest Economic Management Principles |
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Importance of Forests |
Economic Benefits Social Benefits Ecological Benefits |
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Economic Benefits |
Wood Products Non-Timber Products |
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Social Benefits |
Domestic Use Recreation Aesthetic & Spiritual |
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Ecological Benefits |
Climate Mitigation Habitat and Biodiversity Water and soil Improvement |
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Direct Benefits |
Timber Non Wood Forest Products(Medicinal plants, fodder, fuel wood, gum, resin, fruits, flowers, roots, bark, leaves, fiber etc.) |
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Indirect Benefits |
Soil and water conservation, disease regulation, recreation education pollution control temperature control flood control, nutrient cycling, water cycling ground water recharging, Research ,increase rainfall, habitat for wildlife etc. |
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Which can be measured directly in amonetary term by known methods (weight, number, volume, load) |
Tangible Benefits- |
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Which can not be measured directly (Indirect benefits) |
Intangible Benefits |
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is not traded in market |
Economic value |
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based on assumption by known method |
Measured benefits |
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Forest Ecosystem Services |
Direct Use Values Indirect Use Values Non use Values |
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Direct Use Value |
Crops/livestock Capture fisheries and aquaculture Ornamental Resources Animal Skin Fresh Water Timber and other wood fibers Biochemicals, natural medicine, genetuc resources |
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Indirect Use Value |
Water purification and waste treatment Regulation of water timing and flows Erosion control and sediment retention Natural hazard mitigation /Flood control Disease mitigation Regional/ local/ global climate regulation Maintenance of air quality |
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Non use values |
Existence value, Bequest value Ethical and spiritual values Educational and inspirational values Recreation and ecotourism
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Use Value |
Direst Use Value Indirect Use Value Option Value |
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(Existence value -)Originates when people are willing to pay to conserve a resource for the use of future generations e. g. conservation of endangered species, rare species, heritage site etc. |
Non use Value |
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Current use of the resources and services- Timber and non timber forest product (Consumptive); recreation. education, research (Non consumptive). |
Direct Use Value- |
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Related to ecological functions that the forests provide, e. g. ground water recharging, flood control, soil & water, regulationof stream flow, climate mitigation, soil, conservation, improvement. |
Indirect Use Value- |
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Retaining the option of using a forest resources in the future by protecting or preserving it todaye. g. water purification, carbon sequestration, biodiversity, soil fertility, temperature control etc. |
Option Value- |
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Originates when people are willing to pay to conserve a resource for the use of future generations e. g. conservation of endangered species, rare species, heritage site etc. |
Existence Value |
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can simply be defined as an attempt to put monetary values to environmental goods and services or natural resources. |
Valuation |
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is concerned with all values or services or benefits measured in monetary term. |
Economic valuation |
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Need for Forest Valuation |
°Todeterminethetotaleconomicvalueofforests (Tangible and intangible benefits). °Estimatetherelativeimportanceofvarious ecosystems. °Transfer of forest land for developmental activities. Provide a basis for policy |
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Methods of Economic Valuation |
Direct Market Valuation Approach Contingent Valuation Method |
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Many goods and services are traded in local markets, including wood products (timber and fuel), non-wood forest products. |
Direct Market Valuation Approach |
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Quantity of forest produced collected by the local people is recorded |
Direct Market Valuation Approach |
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Time value for collection is consideredUseful method for assessing tangible benefits |
Direct Market Valuation Approach |
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Pricesarederivedwithinthemarketplacethrough interaction between consumers and producers. |
Direct Market Valuation Approach |
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is the most popular techniques toevaluate intangible benefits of forests (Tom, 2009). |
Contingent valuation method |
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This is the survey based method used to estimate the economic value in monetary terms. |
Contingent valuation method |
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is based on directly asking the people how much they are willing to payfor the benefitor willing to accept compensation. |
Contingent valuation method |
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____ of the concerned respondents is necessary. |
Socio-economic characteristics |
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can be conducted on telephone, mail, in person. |
Survey |
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Methods used for applying CVM |
Contingent Referendum Method: Open ended question method. Bidding Game method Payment card method Travel Cost Method Hedonic Pricing Production Function Method |
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A set of monetary values will be given to the respondent.The respondent has to choose one of the value according to his choice. |
Payment card method– |
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The maximum willingness to pay is determined by the bidding process.Bidding start from higher value to lower (till says Yes)From lower value to higher WTP (Till says No) |
Bidding Game method |
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Respondent has the full freedom to state any value for intangible benefits. |
Open ended question method-- |
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(Yes/No)–No freedom to express actual value for WTP |
Contingent Referendum Method: |
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This survey based method commonly used to estimate environmental benefits of recreational sites. |
travel cost method |
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Travelcost,traveltime,expn.onfood, accommodation charges, entry fee, time value is considered. |
TotalCost- |
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Income, group size, education, age, occupation, distance travelled etc.This method give the accuratemonetary value for benefits. |
Basic socio economic variables of respondents is necessary- |
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___ developed travel cost method. |
Clawson (1959) |
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Quality of ecosystem services reflectedin prices. Local propertyA particular buyer may beWilling to pay more amount for some area that he may not be willing to pay for other area.Examples:Pricesoflandandhousesfoundmoreinhill stations than other places.Peoplealways pay more for better environmental quality, aesthetic and scenic views of sites.
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Hedonic Pricing |
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___ is used to estimate the economic value of ecosystem products or services that contribute to the production of commercially marketed goods. |
Production function method |
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The method traces impact of change in ecosystem services on produced goods. |
Production function method |
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improves crop yield, rainforests increase rainfall and crop output, mangrove forests enhance fish breeding, better pollination etc.Compare the reduced cost of input and increased crop yield with previous conditions |
Soil fertility |
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is consideredUseful method for assessing tangible benefits |
Time value for collection |
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are derived within the marketplace through interaction between consumers and producers. |
Priced |
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The Important Function of Accounting and Valuation to Forestry |
Asset Management: Control and Budgeting: Revenue Recognition: Compliance and Reporting: Decision Support: |
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Revenue Recognition: |
Timber Sales- Carbon Credits and Ecosystem Services- |
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Asset Management: |
Forest Inventory- Asset Valuation-
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Decision Support: |
Strategic Planning- Risk Management:- |
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Valuation of forestry assets and financial data generated through accounting processes contribute to ___ |
Strategic Planning |
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Valuation models and accounting information help in identifying and managing financial risks associated with forestry activities. |
Risk Management:- |
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Control and Budgeting: |
Operational Costs - Capital Expenditure- |
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Accounting helps track operational costs associated with forestry activities |
Operational Costs - |
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Forestry companies often make significant capital investments in equipment and infrastructure. |
Capital Expenditure- |
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Compliance and Reporting: |
Regulatory Compliance- Financial Reporting- |
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Forestry operations are subject to various regulations and environmental standards. |
Regulatory Compliance- |
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is essential for stakeholders, including investors, government agencies, and the public. |
Financial Reporting- |
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Accounting ensures accurate recognition of revenue from timber sales. |
Timber Sales- |
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Some forests generate revenue through carbon sequestration or providing ecosystem services. |
Carbon Credits and Ecosystem Services- |
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Accounting helps in maintaining accurate records of the forest's inventory. |
Forest Inventory- |
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Valuation techniques assist in determining the market value of forest assets. |
Asset Valuation - |
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Option value |
water purification, carbon sequestration, biodiversity, soil fertility, temperature control etc. |