Financial statements including the balance sheet, income statement, cash flow statement, and statement of shareholders' equity provide historical records of a business's financial status and performance. The balance sheet depicts assets, liabilities, and equity on a given date, the income statement shows revenues and expenses over a period of time, and the cash flow statement reports cash inflows and outflows. Accounting identifies, measures, and communicates economic information to allow informed judgments and decisions.
Financial Accounting and Management accounting are the two branches of accounting.
Financial accounting stresses on giving true and a fair view of the financial position of the company to various parties.
On the contrary, management accounting aims at providing both qualitative and quantitative information to the managers, so as to assist them in decision making and thus maximizing the profit.
Financial Accounting is the branch of accounting which keeps track of all the financial information of the entity. Management Accounting is that branch of accounting which records and reports both the financial and nonfinancial information of an entity.
Financial Accounting and Management accounting are the two branches of accounting.
Financial accounting stresses on giving true and a fair view of the financial position of the company to various parties.
On the contrary, management accounting aims at providing both qualitative and quantitative information to the managers, so as to assist them in decision making and thus maximizing the profit.
Financial Accounting is the branch of accounting which keeps track of all the financial information of the entity. Management Accounting is that branch of accounting which records and reports both the financial and nonfinancial information of an entity.
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The preparation of financial statements is an important aspect of an organization’s financial management, recording and reporting on financial transactions and activities.
Financial Statement Preparation in New York provides a detailed picture of a company’s financial performance, position, and cash flow to support decision making and financial analysis.
The preparation of relevant financial statements requires a thorough understanding of accounting principles, rules and regulations, as well as attention to detail and accuracy in the recording and reporting of financial statements.
Steps in financial statement preparation.
What are the four 4 major financial statements.pdfsarikabangimatam
Financial statements summarize a company's business activities, financial performance, financial position, and cash flows through a series of written reports. All reports should be structured to convey relevant data in an easily digestible manner. Specifically, a cliff note on the financial performance of the Business Accountants. These reports typically provide a snapshot of a specific period of time and typically represent activity over a specific month, year, or specific time period. These financial statements are critical to understanding your business and performance.
Financial accounting is a method by which a company records and reports revenue, expenses, and income for a specific period. We follow strict guidelines to ensure that our financial statements are accurate and comply with statutory, financial, legal and regulatory requirements. The data in these reports helps outsiders perform a comprehensive financial analysis of company operations and allocate resources more effectively to business owners, investors, and creditors.
Response 1:
Part 1
Memo:
Understanding Similarities and Differences between Financial and Managerial Accounting
Attention
: Susan Thompson
Susan-
In an effort to get you up to speed on our expectations, I wanted to provide some details on the differences you can expect to see between managerial and financial accounting and provide you some examples from both areas.
Financial accounting is the backbone of the day-to-day functions of accounting. From payables, to receivables to collections, this area ensures all of the outstanding bills and debts are paid so the organization can operate. The details received from the day to day management of financial accounting are provided to stakeholders’, creditors, vendors and management to ensure the organization is being forthcoming and so management can use the data to further the position of the company(MUSE: Financial and Managerial Accounting). Reports provided within financial accounting include the following:
Income Statement
Statement of Owners Equity
Balance Sheet
Cash Flow Statement
Each of these documents is used by managerial accounting team members to help make decisions about the future of the organization.
Managerial accounting is optional. This is a team of managers who are trying to plan for future business and need to understand the ebbs and flows of the business itself and how any of the business segments or areas can function more productivity. One thing to note is that Financial Accounting is handled by external persons who try to ensure the strength of financial decisions whereas Managerial Accounting is managed by internal managers responsible for the success of the organizations. Financial Accounting Reporting for the IRS is mandatory and GAAP accounting rules must be adhered too. Managerial Accounting has no set rules nor are they bound to any oversight group and are not required to provide any sort of mandatory reporting.
Additional reports used to analyze the health of an organization are horizontal and vertical analyzes.
Horizontal analysis is where we take a series of reports year over year and try to determine what trends were in assets, equity, cash flow, etc. Using these reports allows the management team to better understand the business and what could be coming in the future. Vertical analysis is where we analyze financial statements based on entries for assets, accounts, liabilities and equities. We review each of these as a proportion of the total account and try to understand what led to any inconsistencies.
If you need any further clarification regarding these concepts, reporting or analysis, please reach out to me directly.
Thank You
Part 2
Attn: Board of Directors
MEMO
In an effort to help our team better understand how we can use our current and previous accounting information to help plan and control for future business, I have broken down details on four key financial reports we receive regularly. These reports include the income sta ...
You realise as a business owner that only quantitative in nature, equivalent, and dependable statistics may lead to success. Financial reporting is an essential element of this activity.It is used to track business performance, establish objectives and milestones, and to arrive at vital future choices.
The preparation of financial statements is a key aspect of an organisation's financial management as it relates to the recording and reporting of financial transactions and activities.
Financial statements support decision-making and financial analysis by providing a comprehensive overview of a company's financial performance, position and cash flow.
1 4. Describe the financial approach to strategic healthca.docxhoney725342
1
4. Describe the financial approach to strategic healthcare planning, considering how managers can
participate most effectively in this process.
4.1 Explain the purpose of the activity statement and statement of cash flows.
4.2 Discuss the process of recording financial information and generating a balance sheet.
4.3 Discuss various asset categories, including cash, marketable securities, accounts
receivable, inventory, prepaid expenses, fixed assets, and sinking funds.
Reading Assignment
Chapter 10:
Taking Stock of Where You Are: The Balance Sheet
Chapter 11:
Reporting the Results of Operations: The Activity and Cash Flow Statements
Unit Lesson
In Unit VI, you will discover that financial reports are prepared by organizations monthly, quarterly, and
annually, and that these reports are essential for determining the financial health of a healthcare organization.
In order to function effectively in healthcare management, you need a very thorough understanding of these
reports and what they reflect about your department and your medical facility overall. A good portion of each
healthcare board of directors meeting is focused on reviewing and interpreting these reports.
Financial reports help managers understand the current financial situation of the organization and also the
financial results of its operation. They provide information not only for management of the organization, but
also for outsiders—for people who take interest in the stability of the organization as it strives to fulfill its
mission of patient care. Just a few of these parties include auditors, local government officials, the state
department of health, and various accrediting agencies.
Preparation of the financial reports which will be examined by individuals external to the organization is
referred to as financial accounting. Financial accounting employs a process of recording financial
transactions, summarizing all of the information contained in the transactions, and then reporting the
information in a set of standardized financial statements.
Balance Sheet
The statement of financial position (commonly referred to as the balance sheet) is the first of the financial
statements. You need a solid understanding of the balance sheet. A balance sheet reports the financial
position of the organization at a moment in time—often the end of a month or end of the fiscal year. For any
specific entity, this financial document provides a highly summarized view of its financial position at any one
point in time.
Financial statements are derived from information contained in and changes to the fundamental equation of
accounting. That equation states that the assets of any entity equal the liabilities plus the net worth of the
entity. All of financial accounting is built around that fundamental equation. In addition, many organizations
follow a set of rules or conventions that are referred to a Generally Accepted Accounting Principles (GAA ...
MUST BE DONE IN 4 HOURS!! NO EXCUSES!!THE ORIGINAL QUESTION WAS.docxclairbycraft
MUST BE DONE IN 4 HOURS!! NO EXCUSES!!
THE ORIGINAL QUESTION WAS:
What kind of information would be found on the financial statements?
Explain how the users of these statements (i.e., investors, creditors, or government agencies) could use the information to help make better informed decisions.
How would you determine if any fraudulent or illegal activity has taken place?
REWORD THE FOLLWOING PARAGRAPHS:
The balance sheet is a document that contains the organization's overview of assets, stakeholder’s equity and liabilities as a snapshot in time. The equation of assets in balance sheet usually equals liabilities in addition to stakeholder’s equity, since assets are remunerated for with either liability, like stakeholders equity, debt search as additions that are paid in capital and retained earnings. The main importance as to why assets are recorded on balance sheet is for liquidity purposes. While liabilities are recorded in the arrangement in which they are remunerated. Basically, the current liabilities are required to be paid annually while long-term are the expected debts. To be remunerated after one year.
Income statement covers a period which is a year mainly for annual financial statements and a sector for the quarterly financial statement. The income statement offers an overview of expenses, revenues, net income and incomes per share. The income statement usually offers more than one year for the corporate analysis of the data (Ittelson, T. R. 2009). Cash flow is the third financial statement that combines income statements and balance sheet. Due to the accounting resolution, net income usually falls of position with cash flow. The statement of cash flow usually settles the income statement through balance sheet in three main business operations. The activities include investing, operating and financing actions.
Operating activities involves cash flow created from regular business activities. Investing operation usually involves cash flow arrived from buying and selling of organizations assets like equipment and real estate. Financing activities involve the cash flow and derived from equity and debts. Analysts usually find the amount of shared purchased. Through these financial statements, it is possible for the organization to conduct the annual financial statement suitably. The analysis is usually the process of evaluating and reviewing the organization financial statements through cash flow, balance sheet and income statement information available in them.
Financial statements are typically used by various individuals for different purposes, especially in the process of decision making. The financial statement usually offers financial information needed by shareholders, creditors among others in order to evaluate the organization's performance. It is essentially important for an investor of the creditor to understand the performance of the company since it acts as an approval that the organization is productive (Fridso ...
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This PowerPoint presentation on "Accounting Transactions and the Accounting Cycle" provides a comprehensive guide to the key concepts in financial accounting. The presentation covers topics such as the accounting cycle stages, from recording transactions to preparing financial statements. It delves into essential accounting principles, including journal entries, rules of debit and credit, and compound journal entries. The presentation also explains opening entries, relationships between journal and ledger, rules regarding posting, and the importance of trial balance for ensuring ledger accuracy. Additionally, it explores subdivisions of journals, such as sales, purchases, and cash journals. With a professional design featuring a cohesive color scheme and engaging visuals, this presentation aims to enhance understanding of accounting practices.
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1. Running head: ABOUT FINANCIAL STATEMENTS
About Financial Statements
Edward Charfauros
Principles of Accounting ACC/280
January 17, 2012
Kurt Meyer
1
2. ABOUT FINANCIAL STATEMENTS
2
Financial Statements
Financial statements provide historical records reflecting a business, individual, or
organization’s financial status. Usually, financial statements relate to business ventures
remaining as analysts and investors primary source for financial information. This paper
provides information about financial statement basics and general accounting principles. A
majority of information within financial statements are corporate finance and valuation.
Accountants attempt to measure an organization’s current standing to its immediate past
performance, and financial analysis provide forward projection.
The Four Primary Financial Statements
The four basic financial statements in accounting report financial data in affective and
economical methods. According to the beginners' guide to financial statements on the United
States Securities and Exchange Commission (SEC) website (2012), “there are four main
financial statements. They are: (1) balance sheets; (2) income statements; (3) cash flow
statements; and (4) statements of shareholders’ equity” (Show me the money! section, p. 1, para.
2).
Accounting balance sheet (or statement of financial position) is an important financial
statement accountants and businesses use. Balance sheets delineate business’s current financial
circumstance, income statements inform revenues and costs, cash flow statements depict cashequivalents and changes, and retained earning statements provide equity changes throughout a
time frame.
Using balance sheet financial statements provide apprehension into organization’s debts,
assets, and shareholder equity during a notable time frame. Usually company’s lists its assets
along the balance sheet’s left side, along the right side list liabilities and debts. However, along
3. ABOUT FINANCIAL STATEMENTS
3
the top of balance sheets lists assets, within the middle list debts, and along the bottom of the
sheet list shareholders’ equity.
Organization's balance sheets present the financial position upon the end of specified
dates. The balance sheet provides an organization "snapshot" of its financial position at a given
point (an instant or moment) in time. Because the balance sheet informs people of a moment in
time of an organization's financial position by date indication along the sheet heading, the sheet
allows people such as creditors to review organization’s assets and liabilities. This valuable
information assists bankers to determine if an organization qualifies for additional currency
lending and credit. Additionally balance sheets inform clients, customers, competitors,
government agencies, investors (current and potential), labor unions, management, and suppliers
on an organization’s status.
Using income financial statements provide an organization’s revenue earnings during a
specific time frame. Additionally income statements reflect secure income from organization’s
expenses and shareholder share earnings. Along the bottom portion of the income statement
displays the total earnings, losses, and often providing an annual record of revenue.
The income statement is a financial document that measures the financial performance of
an organization throughout a specified accounting period. The financial performance
summarizes how organizations incur expenses and revenue through operations and
nonoperational activities. Moreover, showing net profit or accruing losses throughout a specific
accounting period, which is usually throughout a fiscal quarter or annual period.
Statement of changes in equity is a financial document that links the owner’s equity
amount within a business from the start of an accounting period to the end period. The statement
of changes in financial position reflects a particular end period of accounts. The statement of
4. ABOUT FINANCIAL STATEMENTS
4
changes in owners' equity provides information from both statement of changes in equity and
statement of changes in financial position.
Since 1987, the cash flow statement continues to complement the balance sheet and
income statement for organizations as a vital portion for financial reporting, recording cash
amounts, and cash equivalents entering and exiting an organization. The cash flow statement
allows investors to comprehend how organizations operate, derive its income and how it spends.
Additionally organizations use cash flow statements for business analysis.
Defining Accounting
Accounting is about individual and organization accountability. Defining accounting can
be broad in application and businesses. According to the University of North Carolina
Wilmington’s website (2012), “the American Accounting Association defines accounting as the
process of identifying, measuring and communicating economic information to permit informed
judgments and decisions by users of the information” (What is Accounting section, para. 1).
This definition suggests that accounting provides people vital economic information relating to
the economic and financial activities of organizations.
Accounting identifies and communicates the necessity for accounting information.
Communicating the need for accounting information varies through several different ways using
accounting communication methods such as accounting reports. The need for accounting
information requires comprehension prior to attaining accounting information. The majority of
organizations are accountable in one form or another for activities and actions taken.
Organizations produce reports based on activities that reflect organizational objectives and
direction.
Two vast classifications of accounting information exist: financial accounts and
5. ABOUT FINANCIAL STATEMENTS
5
management accounts. Financial accounts aim accounting information toward external users.
Management accounts aim accounting information toward internal users. Although the type of
information reflecting from financial and management accounts differ, the underlying
information satisfies the user’s information inquiries.
Double-entry bookkeeping is an accounting system base on a set of accounts that
identifies and measures accounting information and records information as accounting
transactions. Measuring accounting information can be a complicating process involving
judgments concerning organization’s ownership of assets and liabilities. Double-entry
bookkeeping accurately measures how much an organization loses or profits within a particular
period and frequently demands subjective judgment for a conclusion.
Conclusion
Balance sheets show entity assets, stockholder equity, and liabilities according to report
date. Income statements show results of an entity’s financial activities and its operations
according to reporting period. Cash flow statements show entity's cash flow changes during a
reporting period.
Everyone is capable of preparing a financial statement, although majority of
organizations employ accountants to do the work. Accountants are able to discover
discrepancies and communicate benefits that experts only can help with such as avoiding
taxation, increasing an organization’s image, or allowing an organization to financially worsen.
Accounting and financial knowledge remains important because comprehending these
disciplines provide the necessary tools to manage organization decisions effectively. Successful
operations remain accountable when managing organization finances.
6. ABOUT FINANCIAL STATEMENTS
6
References
University of North Carolina Wilmington. (2012). Accountancy. Career center. Retrieved from
http://uncw.edu/career/accountancy.html
United States Securities and Exchange Commission. (2012). Beginners' guide to financial
statements. Retrieved from http://www.sec.gov/investor/pubs/begfinstmtguide.htm
7. ABOUT FINANCIAL STATEMENTS
6
References
University of North Carolina Wilmington. (2012). Accountancy. Career center. Retrieved from
http://uncw.edu/career/accountancy.html
United States Securities and Exchange Commission. (2012). Beginners' guide to financial
statements. Retrieved from http://www.sec.gov/investor/pubs/begfinstmtguide.htm