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SEMESTER 5 / 2013




MATRICULATION NO : 860704495583001

IDENTITY CARD NO. : 860704495583

TELEPHONE NO. : 013-8899761


LEARNING CENTRE : Tawau Learning Centre




Contents Page

1.0.1 Definition of Accounting 2
1.0.2 Selected Company From Bursa Malaysia in 2011(Dutch Lady
Milk Industries Berhad) 2 Vision and Mission 3 Financial Highlight 4 Main Activities 5 Product or Services 5
2.0.1 Definition of External User 6
2.0.2 External User For Dutch Lady Milk Industries Berhad 7



consumers. purchasing power. Outside of macroeconomic theory. these topics are also extremely important to all economic agents including workers. national income. whereby the theory is used to forecast the effects of a particular policy or event. microeconomics is field of economics that studies the behavior of the aggregate economy.1 Definition of Macroeconomics Macroeconomics is an analysis of a country economic structure and performance and the government policies in affecting its economic conditions. and producers. and inflation. services and resources are determined and factors that influence them. looking at how demand and supply of products. goods and services and eventually raise the people standard of living.0. PRINCIPLES OF MACROECONOMICS (BBEK4203) 1. Economists are interested in knowing the factors that contribute towards a country economic growth because if the economy progresses. Macroeconomics examines economy-wide phenomena such as changes in unemployment.0 INTRODUCTION 1. Macroeconomists also study about the aggregated indicators such as GDP and GNP. gross domestic product. This means macroeconomics examines the function of the economy as a whole system. price and money. Macroeconomics can progress as it tests a particular theory to see how the overall economy functions. but there are three central topics for macroeconomic research. 2 . Macroeconomics encompasses a variety of concepts and variables. Economists define macroeconomics as a field of economics that studies the relationship between aggregate variables such as income. it will provide more job opportunities. rate of growth. unemployment. Macroeconomic theories usually relate the phenomena of output. Other than that. inflation and price levels.

c) What is the Cause of Decline and Growth in an Economy? Any economy will surely go through decline and growth. Macroeconomics will examine the reasons for unemployment. The rate of unemployment will increase when there is a decline in the economy. but unemployment also happens when the economic situation is good.2 Issues in Microeconomics There is several issues in microeconomics. macroeconomics will look at the causes of these changes in the economy and the government policies that can be implemented to overcome an economic problem. d) What Factors Affect Unemployment? What does rate of unemployment mean? Rate of unemployment means there is an available work force that wants to work but has no jobs. Macroeconomics will inquire into the factors that decide on the growth rate of employee productivity. b) Productivity The average labour productivity or the output of a single worker is important to determine the standard of living. types of unemployment and ways to overcome unemployment. Macroeconomics examines the reasons behind the speedy economic growth in the developed nations and understands the reason why this growth is different between the various countries. 3 . The issues are follows : a) What are the Determinants of Economic Growth and Living Standards in a Country? Since a century ago. In relation to this. developed nations have achieved a high rate of economic growth. which in turn has raised their people standard of living. PRINCIPLES OF MACROECONOMICS (BBEK4203) 1.0.

share prices and foreign currency exchange. PRINCIPLES OF MACROECONOMICS (BBEK4203) e) What Factors Cause the General Price Levels or Inflation to Rise? What does inflation mean? Inflation is an increase in the general price level and is usually measured by looking at changes in the Consumer Price Index.3 Microeconomics policies The study of macroeconomics relates to the economic growth of a country. Therefore. the financial.0. The questions asked in a macroeconomic analysis are: (i) What factors affect inflation? (ii) Why does the inflation rate differ from time to time? (iii) Why does the inflation rate differ from one country to another? 1. technology. and people choice of economy. However. namely. interest rate. there are also other policies that can be used by the government to influence the economic performance of a country. such as natural resources. Macroeconomic policies affect the overall performance of the economy. Although many factors. capital stocks. or monetary policies. which acts as a government agency (in Malaysia it is deal with Bank Negara) b) Fiscal Policy 4 . and fiscal policies. Financial policy is controlled by the central bank. a) Financial Policy/Monetary Policy Economists believe that changes in the money supply will influence important macroeconomic variables such as national output. inflation. There are two main macroeconomic policies. contribute towards economic growth. it is also important for you to understand the effects of the many government policies on the economy and the need to develop better policies as this is an important aim in macroeconomics. They are income policies and supply side policies. human resources. government policies also play an important role. labor force.

Meanwhile. workers are encouraged to work more and therefore increase labor supply. 5 . The government will specify the maximum amount by which prices and wages are allowed to rise. PRINCIPLES OF MACROECONOMICS (BBEK4203) The tools used in fiscal policy are taxes and government expenditure. When the government spends more than the income tax collected. A good balance between government expenditure and government revenue is important. c) Income Policy This policy is used by the government to control prices and wages. if the government revenue is more than its expenditure. With a reduction on personal taxes. Government and firms/labor unions sometimes negotiate on the price and the wage-setting behavior. d) Supply-Side Policy This policy focuses on the aggregate supply and on how the production could be increased. it suffers a budget deficit. The main instrument of the supply side policy is the tax system. then the government will have a budget surplus.

economists agree that there can still be unemployment although the economy is at a level where it has achieved full employment. Basically. d) Rapid International Trade Activities All countries participating in international trade want to benefit from specialization and trade. there is no rapid inflation or deflation. This would mean there is an increase in the real per capita income from year to year. PRINCIPLES OF MACROECONOMICS (BBEK4203) 1. When prices remain largely stable.0. 6 . c) Good Economic Growth Achieving good economic growth is also one of the aims of macroeconomics. This also means that the prices of some goods and services may increase. Microeconomics objectives are :- a) Achieving full Employment This does not mean that there will be no unemployment at all or that the rate of unemployment will be zero in a country. Empirical studies have shown that those countries that are actively involved in international trade benefit in terms of more production output and higher consumption levels.4 Objectives of microeconomics According to the economist. meaning that those who are able and willing to have a job can get one. b) Price Stability Generally. price stability means there are no changes in general price levels. while some other prices may drop at the same time. there is several objectives of microeconomics.

Sterilised milk and Growing-Up Milk. Dutch Lady Malaysia is the market leader in key milk categories such as UHT milk. Currently. 7 . PRINCIPLES OF MACROECONOMICS (BBEK4203) employs 600 Malaysians.

2 Financial Highlights 8 .4.” 1.1 Vision And Mission The vision of this company is “To further strengthen our position as the leading dairy company.0. driving growth.4. PRINCIPLES OF MACROECONOMICS (BBEK4203) 1.0.” The Mission of this company is “Helping Malaysians move forward in life with trusted dairy nutrition.

Vifit.4. Completa. based on the figures of 2008.5 billion euros. Fruttis. Pöttyös. Frisian Flag.4. dairy drinks. 1. NoyNoy.0. Its most important brands are Campina.4 Product or Services The product range consists of consumer milk. Foremost. yoghurts. Optiwell. Optimel. 9 . Yazoo. coffee creamers. Dutch Lady Industries Berhad organized its activities into four business groups: Consumer Products Europe. Fristi. Milli. Dutch Lady. Friesche Vlag. Consumer Products International. Puddis. Betagen.3 Main Activities According to the history of this company. Cheese & Butter and Ingredients. Rainbow. milk in powder and concentrated form.000 people and has about 100 production and sales locations in 25 different countries. The company employs 21. PRINCIPLES OF MACROECONOMICS (BBEK4203) 1. Chocomel.0. baby and infant food. desserts. cheese. Dutch Lady Industries Berhad annual revenue amounts to 9. Peak. Mona. cream. butter and ingredients. Landliebe. Fruttis.

Inland Revenue Board. Valess. CoolBest. The types of decision made are different according to user groups.1 Definition of External User External users are people who do not have direct access to the resources of the company and to not involved in the management of the company.0 EXTERNAL USER 2. External users of accounting information include the following: Creditor: Determining the credit worthiness of the organization. Debic. DubbelFrisss. Kievit. loan providers. investors make decisions on whether to invest in a company. Creamy Creation and Nutrifeed. Frico. For example. 2. Examples of external users are investors. 10 . Buttergold.0. loan providers make decisions on whether to approve loans while the Inland Revenue Board decide on the total tax to be imposed. government agencies and the public. DMV. Domo. PRINCIPLES OF MACROECONOMICS (BBEK4203) Appelsientje. Creditors include suppliers as well as lenders of finance such as banks. Terms of credit are set according to the assessment of their customers' financial health. Milner.

Investors: Analyzing the feasibility of investing in the company. 2. Regulatory Authorities: Ensuring that the company's disclosure of accounting information is in accordance with the rules and regulations set in order to protect the interests of the stakeholders who rely on such information in forming their decisions. Investors want to make sure they can earn a reasonable return on their investment before they commit any financial resources to the company. Customers: Assessing the financial position of its supplier which is necessary for a stable source of supply in the long term.0. PRINCIPLES OF MACROECONOMICS (BBEK4203) Tax Authourities: Determining the credibility of the tax returns filed on behalf of the company.2 External User For Dutch Lady Milk Industries Berhad According to the Dutch Lady Milk Industries Annual Report 2011 The information required for the external user are shown below :- a) Financial Highlight 11 .

PRINCIPLES OF MACROECONOMICS (BBEK4203) b) Material Contract 12 .

Directors or management by any relevant regulatory bodies. the Company did not issue any options. forecast or projection for the financial year. Warrants or Convertible Securities During the financial year. d) Options. The Company did not release any profit estimate. forecast or projection There was no material variance between the results for the financial year and the unaudited results previously announced. f) Non Audit Fees During the financial year.000 in non-audit fees to the External Auditors. c) Share Buyback During the financial year. there were no material contracts entered into by the Company (not being contracts entered into the ordinary course of business) involving directors and substantial shareholders. there were no share buybacks by the Company. h) Profit Guarantees 13 . warrants or convertible securities. PRINCIPLES OF MACROECONOMICS (BBEK4203) For the financial year. g) Profit estimate. the Company paid RM15. e) Imposition of Sanctions There were no sanctions and / or penalties imposed on the Company.

CBNY for DFA Emerging Markets Small Cap Series 5) Amanahraya Trustees Berhad . information must possess by a feedback value. it should be made available to the user before it loses its capacity to influence decisions.V. 14 . there is about 30 largest external user which is invest to this company. for example :- 1) FrieslandCampina DLMI Malaysia Holding B. it should be provided on a timely basis. according to the annual report of this company.Amanah Saham Malaysia 3.* 2) Amanahraya Trustees Berhad as 1Malaysia 3) Kumpulan Wang Simpanan Guru-Guru 4) Citigroup Nominees (Asing) Sdn Bhd . PRINCIPLES OF MACROECONOMICS (BBEK4203) During the financial year. j) Auditor Report The auditor report is one of the important thing to make the external user for this company to make an investment to this company Other than that. Feedback values allow the enterprise and the user to reposition themselves in response to such change. In order for information to be relevant. In other words. there were no profit guarantees given by the Company. Relevance refers to the capacity of information to influence the decision-making process of users.0 FEEDBACK VALUE To make a difference in the decision process. Feedback value also can be derive from what information tell about the past. The feedback value often receive less prominence that other qualities in the conceptual framework. It enables user to make predictions about the future. Feedback value means relevant information must be able to assist users in substantiating or correcting early expectations matters at hand. i) Utilization of proceeds The Company did not carry out any corporate exercise to raise funds during the financial year.

expenses. Profit guarantees. is the information which is given from the company. After the investor look at the feedback value from the company. When the company give the estimate profit to the investor. when we want to invest in one of the company. and then the company did not give us the information such as their financial highlight for example. where the feedback value. the investor will be search whether the company give the estimate profit to the investor or not. and/or asset acquisitions and dispositions. Utilization of proceeds and much more. and to attract user to make an investment in the Dutch Lady Industries especially is Financial Highlight. Non audit fees. Material contract. Feedback value is very important because it can be a reference by the investor to get a confirmation and expectation about future cash generating ability by the company. Forecast value also can be defined as relevant information which is must be able to assist users in forecasting. will be fear to invest. 4. because we did not know about the cash generating ability from that company. For example. which can convenience the investor to make the investment. Auditor report. 15 . It’s a different with the feedback value. It also can be known as profit estimate by the investor. We also dot know how much the profit we will gain after we invest in the chosen company. PRINCIPLES OF MACROECONOMICS (BBEK4203) The most important figure in financial statements with feedback value is the earnings figure. it can make the investor trust to the company and will be invest to the company. The other example of the information which is can be assist user to make a decision. which conveys information about the success of the ventures that have been invested in and also about the performance of the manager who have been responsible for running the business. we as the investor.0 FORECAST VALUE A forecast value is a projection of an entity's future revenues.

Valid sales forecasts give the company a framework for setting realistic goals for its sales teams. there were no profit guarantees given 16 . Accurate predictions and smooth management of the supply chain help keep materials and parts vendors happy because vendors have fewer problems with rush orders or cancellations. from this company report. thus reducing costs. The Company did not release any profit estimate. rather than late deliveries or out-of-stock notices. in term of profit guarantees. they said “During the financial year. A forecast also gives the company time to arrange the financing needed for expansion. the report said “There was no material variance between the results for the financial year and the unaudited results previously announced. customers receive timely deliveries of what they ordered. Accurate predictions allow a business to purchase raw materials. Other than that accurate long-term forecast value enable a business to better manage financial and other planning. Companies using the perpetual system simply report the inventory account balance in such situations. Effective sales forecast value help a business manage its supply chain more economically and efficiently. An accurate forecast enables a business owner to keep a lower inventory. forecast or projection for the financial year”. Management can plan new facilities for production and storage when and where they will do the most good. For example. In addition. Other than that. Accurate forecasts help managers foresee the need for more staff in time to recruit and train them. According to this company annual report 2011. parts and services more favorably because it has sufficient time to shop for prices. in additional compliance information. PRINCIPLES OF MACROECONOMICS (BBEK4203) Other than that companies sometimes need to determine the value of inventory when a physical count is impossible or impractical. but companies using the periodic system must estimate the value of inventory. Raw materials efficiently become the right number of finished products and move to the right locations. We make an example for the forecast value according to the Annual Report of the Dutch Lady Milk Industries Berhad. Satisfied customers keep on buying from the company in the future. a company may need to know how much inventory was destroyed in a fire.

However. accounting allocates to periods and. to the point. But observables are often generated by nature. albeit with error. they give the financial highlight for every year. such that tomorrow’s weather is forecasted based on the principles of meteorology. It is because its a purely statistical approach to forecasting sees the object of the forecast as a drawing from a conditional distribution. From this statement it can make the investor feel fear to invest in this company. 17 . Accounting is self-referential. accounting principles determine the transition from the present to the future. So those laws are utilized in the forecasting. By given the good financial highlight or by showing good performance report the investor will be more interested to invest in this company. Accordingly. with future numbers specified as the target for forecasting determined in part by the accounting for the current numbers. That self-reference directs the forecasting. PRINCIPLES OF MACROECONOMICS (BBEK4203) by the Company”. Other than that in accounting forecast value informs that the specification of accounting for the future also specifies the accounting for the present. observed numbers is also a matter of accounting. and the risk (error) in the forecast given by distribution of unpredictable realizations around this expectation. These features are referred to as a generating “process”. Statistical forecasting specifies that evolution with parameters from a process estimated from the data or dictated by nature. with the expected value given by transitional parameters applied to current observables. so forecasting of future accounting numbers from current. with the process governed by laws of nature. allocates between the present and the future. The statistical exercise simply estimates the parameters of the process from behavior in the data. from this report also. Accounting specifies the evolution from the process dictated by the accounting principles employed. Forecast value also is very important in accounting. albeit often not deterministically. to make the investor make an investment to the chosen company. Another that by it is very important to understanding about the accounting information. 18 . from this we can know how important the feedback value and the forecast value. PRINCIPLES OF MACROECONOMICS (BBEK4203) we need to know the total net revenue in a month (gross revenues minus all expenses) to know whether we can afford to buy the car. We also need to estimate other costs that might be involved in having a car. We need financial information to make economic decisions. Accounting Information Systems. Other than that. Retrieved 7 December 2012. we also need accounting in our daily lives. REFFERENCE Dutch Lady Milk Industries Berhad Annual Report 2011 http://www. the company. the feedback value and forecast value are given. It is because. when making a decision on buying a new car. especially Dutch Lady Milk Industries Berhad. It is sometimes referred to as the language of business since it communicates the financial performance and well being of an organization. For example. and the accounting is a financial information system that can helps us make better economic decisions. This type of the relevant of decision characteristic are very important. can make the investor more interested to invest in their company. In fact.pdf Accounting Information Systems: Information on Collection.0 CONCLUSION For the conclusion. It is because accounting plays an important role in our daily lives without us realizing it. Storage and Processing of Financial and Accounting Data.

. 1913. Marshall B. Pearson. 2 19 . and Paul John. 2nd edition. 2009 http://www. Lo and Fisher: Intermediate Accounting. Toronto 2014. Accounting Information Systems. Cedar Goodyear. p. Iowa. Goodyear-Marshall Publishing Co. p.7 Archive. NJ: Pearson Prentice Hall. Lloyd Earnest: Principles of Accountancy. PRINCIPLES OF MACROECONOMICS (BBEK4203) Romney.aicpa. Upper Saddle River. ISBN 978-0-13- 296588-0.