2. Briefly describe the key processes in financial accounting General ledger, which is used to record the financial effects of business processes. Accounts receivable, which is used in the fulfillment process. Accounts payable, which is used in the procurement process. Asset accounting, which is used to record data related to the purchase, use, and disposal of capital
Once a company identifies the economic events, it records those events in order to provide a history of its financial activities. It is important to note here that recording consists of keeping a systematic, chronological summary of events measured in the accepted currency. Finally, the company communicates the collected information to interested users by means of accounting reports. The most common of these reports are called financial statements. To make their reports meaningful, a company reports the recorded data in a standardized way according to generally accepted accounting principles (GAAP).
Capitalization ratios evaluate the financial leverage of a company. The ratios compare the funds using from short and long-term to funds obtained from shareholders. A high ratio of debt to capital increase interest expense and in worst scenarios it puts the company at risk when there are fluctuations in sales volume and cash flow. Objective The objective of this report is to evaluate the financial performance of Eaton Corporation for the three year period 2009, 2010 and 2011. And compare with the industry and its competitors average.
Why is working capital an important consideration for entrepreneurial firms? Working capital is a firm’s asset minus its current liabilities and it is important because it represents the amount of liquid assets the firm has available. 5. What is the purpose of a statement of cash flows? Statement of cash flows summarizes the changes in a firm’s cash position for a specified period of time and details why the change occurred.
PROFIT AND LOSS ACOUNT AND BALANCE SHEET In this report I am going to interpret key element of profit and loss account and balance sheet by explaining the purpose of each element and who would find it useful. Profit and loss account A profit and loss account is financial document that calculates the amount of gross and net profit that a business takes on annual basis. It is also outlines the loss which has occurred trough the business. There are many parts included within a profit and loss account, all of which I am going to briefly explain. It is important to have a profit and loss account within a business to carry out correct usage of the money.
D. Available evidences regarding clearing of payments or transactions that took place between when the mailed payments were received and the specific dates when the payments were posted in the company’s bank account. In view of the above, as the CFO, accounts receivable can be brought back in line by executing the under mentioned activities in the correct departments. 1. Preparation of aging accounts receivable schedule and to review of existing credit collection policies, standards and terms.-the finance department is responsible for this activity. The objective of this activity is to characterize existing accounts receivable and to classify them in the correct manner of current and outstanding.
Phase 1 Task 2: Individual Project Applied Managerial Accounting ACCT614-1204A-01 Colorado Technical University Professor: Tracie Edmond Donna Smith 10/15/2012 ABSTRACT: In this assignment I am a “corporate business financial analyst” and I will be discussing the essential financial information, such as explaining the basic financial statements and the type of information that each statement contains, and how this information is used and why it is necessary for the Board of Directors and executive management team with essential financial information on the management of the enterprise. MEMO: 10/15/2012 COMPANY: The Sparklin Automotive Company (SAC) TO: The Board of Directors and Executive Management Team TOPIC: Basic Financial Statements and Accounting Information FROM: Donna Smith In this memo is a list of the basic financial statements, including the information that is needed for each statement, and what this information is used for. These statements will help you to understand these financial statements and the necessary information that is needed for each statement. There are many factors to consider in planning, controlling, and decision making processes. There are several reasons to review and compare the different sections of the company’s financial statements, which are explained within this documentation.
Explaining Basic Accounting Concepts and Business Structure Identify and describe the sources of generally accepted accounting principles. Generally accepted accounting principles (GAAP) are a set of principles, procedures, and authoritative standards set by policy boards and simply the commonly accepted way of recording and reporting financial information The Financial Accounting Standards Board (FASB) has been the designated organization in the private sector for establishing standards and interpretations of financial accounting and reporting. The APB main purpose in the GAAP process were to “advance the written expression of accounting principle, determine appropriate practices, and narrow the areas of difference and inconsistency in practice” (Kimmel, Weygandt, Kieso 2007, p.8). The APB objective is to develop a conceptual framework that would help in the resolution of problems as they became evident and research the issues before the AICPA issued pronouncement. AICPA helps with regulating the accounting profession and enforce account principles.
Meaning Financial management is broadly concerned with the acquisition and use of funds by a business firm. It deals with the situations that require selection of specific assets, or a combination of assets and the selection of specific problem of size and growth of an enterprise. In other words, FM is planning, directing, monitoring, organizing, and controlling of the monetary resources of an organization. By Financial Management we mean efficient use of economic resources namely capital funds. Financial management is concerned with the managerial decisions that result in the acquisition and financing of short term and long-term credits for the firm.