Recording also will classify and summarize economic events. The bookkeeping function is included in the recording of economic events. Accounting reports are then communicated to interested internal and external users by means of financial statements. Internal interested users are individuals inside the company who plan, organize and run the business. These users can be comprised of finance directors, marketing managers, human resources, or management.
Investors and creditors are examples of external users of accounting information. Investors make the decision to buy, sell, or hold stocks and creditors evaluate the risk of selling on credit or lending
Which of the following choices regarding the proprietary fund financial statements is true? A. The Statement of Net Assets (Balance Sheet) reflects equity as contributed equity and retained earnings. B. Normally, a reconciliation is required between the proprietary fund financial statements and the business-type activities column in the government-wide financial statements.
The statement of cash flows contains the information to show where the business obtained cash during a period of time and how that cash was used. The balance sheet indicates any assets and claims to assets at a certain point in time, the claims are
Kevin Leonel Sonilal XACC/290: Principles of Accounting I Professor Steven German December 6th, 2013 Financial Statements The four basic financial statements are the balance sheet, the income statement, the retained earnings statement, and the statement of cash flows. The incomes statement demonstrates how well the business has performed for a certain period of time. The items reported in the income statement are its revenues and expenses. From an internal user’s standpoint, the financial statement is a management tool. It can be used to evaluate the business’ strengths and weakness, and helps in deciding what route the business should take to make improvements or further its success.
The operating activities section analyzes the company's flow of cash as it relates to a net loss or net income. It shows the cash that was used or received as it relates to the company's operating activities. The investing activities section analyzes the company's flow of cash from all of its investment activities. This usually includes the sales or purchases of property, equipment, and investment securities. The financing activities section analyzes the company's flow of cash from its financing activities.
Week 2 Accounting Information System · What is the role of the accounting equation in the analysis of business transactions? · Cash Basis Accounting Defined · Accrual Basis Accounting Defined Week 3 ACCT 504 Week 3 Case Study 1 (The Complete Accounting Cycle). Merchandising Operations and Inventory Why is inventory important for a business?
Cash Inflows Income from sales: The money earned from selling goods and services creates an inflow of cash to the business. This is often called sales revenue or turnover. Loans from banks: it is common for a new business to borrow money in order to buy new items such as vehicles, machinery or property. When the loan is given to the business, this becomes a cash flow for the business. Money invested by the business’ owners: When a business is first started, its owners (sole traders or shareholders, for example) may invest money into the business, resulting in a cash flow.
These are tangible assets and examples of these assets are premises, fixtures and fitting, equipment and vehicles. For business alpha the fixed assets are 344,000. The next section for the balance sheet is current assets these are the items of value that is owned by a business which its values are likely to be help on a regular basis. Examples of current assets are stock, debtors and cash. For business alpha the total current asset calculation is to add all the assets In order to receive the full current assets.
There are three main categories for the Statement of Cash Flows. The first is the “Cash flows from operating activities”. This category includes the cash activities for the daily transactions of the company. This includes the revenues the company makes from its business and the expenses related to making this revenue (payments to creditors, utilities, salaries, etc.). Investing activities have to do with the company buying a major asset, such as land, large equipment, buildings, etc.