Details

Case

Educator Copy

STAR MOBILES - COMMUNICATING FINANCIAL INFORMATION

Omair Haroon


INDUSTRY : Telecommunication

AREA : Accounting & Control

ORGANIZATION :

LENGTH : 4

LUMS No : 01-521-2018-1

PUBLICATION YEAR : 2018

DESCRIPTION

KEYWORDS:

Financial accounting, financial statements, enterprise, small business, fundamental accounting principles


DESCRIPTION:

The protagonist in the case has started his own small business of trading mobile phones. He is convinced that growth in the bank balance of his business account represents profit. In a conversation with his friend, he reveals several misconceptions people generally have about measuring performance and financial position of a business entity.


LEARNING OBJECTIVES:

This case introduces fundamental accounting principles and assumptions while preparing financial statements of a business enterprise. This case can be taught in the second session of an MBA or Executive MBA financial accounting course after the students have been exposed to basic terms, elements of financial statements and technicalities of debits and credits. The case familiarises students with: 1. Objectives of accounting 2. Elements of financial statements (Assets, Liabilities, Equity, Revenue, Expenditure) 3. Fundamental assumptions in accounting (Economic entity, going concern, monetary unit, periodicity) 4. Difference in cash-flow and accruals based accounting 4. Conservatism, cost, fair-value, revenue recognition and expense recognition principles in accounting 5. Classification issues in preparing financial statements


SUBJECTS COVERED:

Financial Accounting