Financial Accounting for 12th Class Students.pptx
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Financial Accounting for 12th Class Students.pptx
- 3. • Financial Accounting Is a Fundamental Aspect of the Business World. It Involves Recording, Summarizing, and Reporting the Financial Transactions of a Business. This Information Is Important for Stakeholders Including Investors, Creditors and Management to Make Informed Decisions. www.getssolution.com
- 5. • Assets: These Are Resources Owned by a Business, Such as Cash, Inventory, and Equipment. • Liabilities: These Are Obligations That a Business Owes to Outside Parties, Such as Loans and Accounts Payable. • Equity: It Represents the Owner’s Stake in the Business and Is the Remaining Interest in the Assets After Liabilities Are Deducted. • Income: Revenue Generated From Business Operations. • Expenses: Costs Incurred in Running a Business. www.getssolution.com
- 7. The Basis of Financial Accounting Is the Accounting Equation: Makefile Assets = Liabilities + Equity This Equation Must Always Remain in Balance, Ensuring That Every Financial Transaction Is Accurately Recorded. Double Entry Accounting Financial Transactions Are Recorded Using the Double-Entry Accounting System. For Each Transaction, at Least Two Accounts Are Affected: One Account Is Debited, and Another Account Is Credited. Debit Increases Assets and Expenses. Credit Increases Liabilities, Equity, and Income. www.getssolution.com
- 9. 1. Income Statement The Income Statement Shows the Company’s Revenues and Expenses Over a Specific Period. It Helps Determine Profitability. 2. Balance Sheet The Balance Sheet Provides a Snapshot of a Company’s Financial Position at a Specific Time. It Lists Assets, Liabilities and Equity. 3. Cash Flow Statement This Declaration Monitors the Flow of Financial Resources Into and Out of the Company. This Is Necessary to Assess Liquidity. www.getssolution.com
- 11. Financial Ratios Are Used to Analyze the Financial Health and Performance of a Company. Some Common Ratios Include: Profit Margin: Net Income as a Percentage of Revenue. Return on Equity (Roe): Measures Profitability Relative to Shareholder’s Equity. Current Ratio Evaluates Liquidity by Comparing a Company’s Current Assets to Its Current Liabilities. www.getssolution.com