...Financial statements Financial Statements - Purpose of Accounting ACC 280 May 17, 2011 Carol Harker Financial Statements - Purpose of Accounting Every business has a need to generate profit and remain in the black. In today’s business world, it is important to have the means to track and monitor the gain or increase of income and profits within the organization. According to Weygandt, “Accounting can be defined as activity that is used to identify, record, and communicate the economic events of a business.” (Weygandt. 2008.) Included in the report we will discuss the purpose of accounting and identify the four basic types of financial statements that are used. Finally we will discuss how the core financial statements of accounting are connected to each other and their uses for all stakeholders in a company. The purpose of accounting is to keep track of economic events for a business. “Accountants are primarily employed to track the flow of money through an organization” (QuickMBA, 2010). Good accounting practices make it easy to keep track of finances for any type of business. “Keeping an accurate balance sheet is a fundamental part of running even the most basic of an organization” (QuickMBA, 2010). Activities such as sales, purchases, and any interest earned from investments are classified as economic and posted to a specified account record. Accountants have a code of ethics that they must adhere to ensure integrity in the reporting process. The use of an accounting...
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...Ling | BG13110503 | HE20 | 4. | Yeo Kai Yuan | BG13110575 | HE20 | SUBMISSION DATE: 29th April 2016 1. The accountant has stated in the footnote to these financial statements that the accounts ‘constitute special-purpose financial statements’. a) What are special-purpose financial statements and how are they different from general-purpose financial statements? Special-purpose financial reports are different from general-purpose financial statements as it is a set of financial statements that are prepared using a special purpose framework to cater to the particular needs of specific users who intends to use it. It is not intended to be view by the public, and therefore have a very limited use for anyone other than the intended users. General-purpose financial reports however, provides fundamental and detailed information on the entity. The major differences between the 2 types of report is the special purpose framework. Special-purpose are usually for the use of internal users such as managements. It incorporates any type of financial report prepared to fulfil that purpose. Reasonable structures may go from a schedule of numbers to a full set of financial statements prepared using double-entry books of account. Special-purpose financial statements are quicker and cheaper to prepare then general purpose and it may demonstrate that...
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...Chapter 01 Introduction to Accounting and Financial Reporting for Governmental and Not-for-Profit Entities True / False Questions 1. Special purpose governments generally provide a wider range of services to their residents than do general purpose governments. True False 2. Examples of general purpose governments include cities, towns, and public schools that receive tax revenue to finance the services they provide. True False 3. The Governmental Accounting Standards Board (GASB) is the body authorized to establish accounting principles for all state and local governments, both general purpose and special purpose. True False 4. The Governmental Accounting Standards Board (GASB) is the body authorized to establish accounting principles for all government entities. True False 5. The Financial Accounting Standards Board (FASB) is the body authorized to establish accounting principles for all colleges and universities and health care entities. True False 6. Neither governmental nor not-for-profit entities have residual equity that can be distributed to owners. True False 7. A characteristic common to governmental and not-for-profit organizations is that they do not exist to provide goods or services at a profit or profit equivalent. True False 8. The needs of users of government financial reports are the same as those of users of business entity financial reports. True False 9. The Federal...
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...district is a type of special purpose government. A primary government is broader in scope than a special district. According to GASB a primary government can be a state government, a general purpose government, or a special purpose government. To qualify as a primary government, GASB indicates a special purpose government needs to have a separately elected governing body, and be legally separate and fiscally independent of state or local governments. This definition is similar to the definition provided by the Bureau of Census for a special district. Therefore, a special district could be considered a type of primary government. 9-2. The letter of transmittal generally cites legal and policy requirements for the report. It can also provide information on factors relating to government services and operations. Since the transmittal letter is generally not a part of the audit, it can include somewhat subjective information. On the other hand, the MD&A is considered required supplementary information (RSI) subject to review by the auditor. As such, the MD&A can only contain material set out by the GASB standards. Some of the information required to be included in the MD&A is an overview of financial activity for the year, explanation of the contents of the CAFR, and a description of the financial condition and financial trends of the government. 9-4. According to the GASB a financial reporting entity is a primary government...
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...important financial statements are in accounting. All the accounting professors put so important on financial statements because one of their objective is to make sure students are well familiar with financial statement before graduating. Financial Accounting is the procedure of delivering data to the outsiders in a special report call financial statement. Accounting field uses financial statements to give data about money related position and execution to different business groups. Financial statements are used by Managers, Investors, Suppliers, Customers, Competitors, and Governments to stay with the track about fund and settling on economic choices. Financial statements covered organization two important reports, which are Balance Sheet and Income Statements. Balance sheet and income statement are important for accounting field to put yearly or month to month financial statements. Financial statements utilizes language of fundamental accounting, currency, and numbers. Financial statements of a business are used to give data about the status of the business. In accounting field financial statements give the information of organizations to mangers or other companies. To settle on all around informed choices, invested individuals must have the capacity to accept that an organization's financial statements are an accurate representation of its performance. According to the article Objectives of Financial Accounting and Reporting from the Viewpoint of the Financial Analyst “The...
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...activities of your business is maintaining accurate up-to-date financial records. Accounting records and reports help you run your business efficiently and profitably by keeping track of money earned and spent. Accounting records are key sources of information and evidence used to prepare, verify and/or audit the financial statements. They also include documentation to prove asset ownership for creation of liabilities and proof of monetary and non-monetary transactions. * Purpose and use of trial balance Trial Balance is a list of closing balances of ledger accounts on a certain date and is the first step towards the preparation of financial statements. This list will contain the name of each nominal ledger account and the value of that nominal ledger balance. Each nominal ledger account will hold either a debit balance or a credit balance. The debit balance values will be listed in the debit column of the trial balance and the credit value balance will be listed in the credit column. The trading profit and loss statement and balance sheet and other financial reports can then be produced using the ledger accounts listed on the trial balance. The name comes from the purpose of a trial balance, which is to prove that the value of all the debit value balances equal the total of all the credit value balances. By listing every nominal ledger balance, ensures accurate reporting of the nominal ledgers for use in financial reporting of a business's performance. If the total of the debit...
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...MEMORANDUM TO: Senior Accounting FROM: Staff Accountant DATE: June 29, 2015 SUBJECT: Shared-Based Payment Reporting and Special Purpose Entities (SPE) CC: Team members ______________________________________________________________________________ As an Accounting Firm it is very important that we follow the most recently changed or amended regulations and standards set by the Financial Accounting Standards Board (FASB). As of 2009 the Financial Accounting Standards Board (FASB) has made amendments to Shared-Based Payment Reporting and Special Purpose Entities. The amendments made were to Statements No. 123 and 95 which covers the Share-Based Payments and Statements No. 123 and 95; the FASB. Also revised, Statements No. 166 and 167 which pertains to Special Purpose Entities (SPE). Share-Based Payment Reporting In the process of an audit, it is important to review the accounting process in terms of how share-based payment is reported to Sensure the entity processes are in line with Generally Accepted Accounting Policies (GAAP). Share-based payment is a complex area to both report on and audit as almost every transaction is unique and referencing IFRS No.2 for the purpose of the audit is not always clearly defined. Defined, share-based payment is an arrangement in which an entity purchases goods or services in exchange for issuance of the entity’s equity instruments or cash payments based on the fair value of those equity instruments. IFRS No.2 has two defined...
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...Question 1(i) Main purposes of Conceptual Framework Document The Conceptual Framework explains the main objectives as well as the concepts that underlie financial accounting and reporting. The Conceptual Framework creates the concepts that are useful in developing International Accounting Standards and other documents that provide guidance on information included in general purpose financial statements. It standardizes the development and revision of accounting standards. However, the framework does not override the accounting standards in this case. The main purpose of financial accounting and reporting is basically the foundation of the Conceptual Framework. The Conceptual Framework document generally explains the concepts that underlie the preparation and presentation of financial statements for external users such as the investors, creditors, government and so on in order to help them to make wise decision. Secondly, it also support the development of future accounting standards and also minimizes the basis for alternative accounting treatments by creating the rules that should be followed in preparing financial information. Thirdly, it can also help preparers and auditors of financial information in dealing with issues that are not the subject matter of an accounting standard for any transactions, events, conditions or circumstances. Lastly, it aids national standard setting bodies in developing national accounting standards. It also prevents the accountancy profession...
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...Financial Statement Differentiation – Individual Paper Mary Lou Gasca Accounting ACCT/561 March 18, 2013 Moises Rodriguez Financial Statement Differentiation – Individual Paper Financial statements are tools that people use to evaluate the potential of a business’ organization. There are four types of financial statements for two main types of users (internal and external), which is beneficial, depending on the type of business (sole proprietorship, partnership, and corporation). Regardless of the type of business, financial statements assist in making business decisions for internal and external users. Internal users are the business managers, owners, and an organization’s personnel who contribute to the operations of the business. External users are creditors, investors, and individuals of interest for the business (customers, for example). Financial statements also assist in identifying, depending on the nature of the business, an organization’s resources, profits, debts, business creditability, and financial health of business activities. The four types financial statements, which report financing, investing, and operating...
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...1 To purchase this visit here: http://www.nerdypupil.com/product/acc-290-week-1-discussion-question-1-2/ Contact us at: nerdypupil@gmail.com ACC 290 WEEK 1 DISCUSSION QUESTION 1 ACC 290 Week One – DQ #1 What are the four basic financial statements? What is the primary purpose of each of the four basic financial statements? In your opinion, which financial statement is the most important? Explain why. How would the financial statements be useful to managers and employees? How would the financial statements be useful to investors and creditors? Home Work Hour aims to provide quality study notes and tutorials to the students of ACC 290 Week 1 Discussion Question 1 in order to ace their studies. ACC 290 WEEK 1 DISCUSSION QUESTION 1 To purchase this visit here: http://www.nerdypupil.com/product/acc-290-week-1-discussion-question-1-2/ Contact us at: nerdypupil@gmail.com ACC 290 WEEK 1 DISCUSSION QUESTION 1 ACC 290 Week One – DQ #1 What are the four basic financial statements? What is the primary purpose of each of the four basic financial statements? In your opinion, which financial statement is the most important? Explain why. How would the financial statements be useful to managers and employees? How would the financial statements be useful to investors and creditors? Home Work Hour aims to provide quality study notes and tutorials to the students of ACC 290 Week 1 Discussion Question 1 in order to ace their studies. ACC 290 WEEK 1 DISCUSSION QUESTION 1 To...
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...INTERNATIONAL STANDARD ON AUDITING 200 OBJECTIVE AND GENERAL PRINCIPLES GOVERNING AN AUDIT OF FINANCIAL STATEMENTS (Effective for audits of financial statements for periods beginning on or after June 15, 2006)∗ CONTENTS Paragraph Introduction .................................................................................................... 1 Objective of an Audit of Financial Statements .............................................. 2-3 Ethical Requirements Relating to an Audit of Financial Statements ............. 4-5 Conduct of an Audit of Financial Statements ................................................ 6-9 Scope of an Audit of Financial Statements .................................................... 10-14 Professional Skepticism ................................................................................. 15-16 Reasonable Assurance ................................................................................... 17-21 Audit Risk and Materiality ............................................................................. 22-32 Responsibility for the Financial Statements ................................................... 33-36 Determining the Acceptability of the Financial Reporting Framework ......... 37-48 Expressing an Opinion on the Financial Statements ...................................... 49-51 Effective Date ................................................................................................ 52 ∗ ISA 315, “Understanding...
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...The Four Basic Financial Statements By Stain Baba [Course] [Instructor] [Due Date] The Four Basic Financial Statements Managers of businesses can be considered as stewards who have been entrusted with the responsibility of the day to day running of business activities. In this regard, they are expected to report back to those who appointed them and to other relevant stakeholders on how well they have executed their assigned task(s). One of the established ways of reporting to owners of the company and other stakeholders is through the use of financial statements, which can be used to ascertain the level of effectiveness and efficiency with which the managers have handled the affairs of the company and at the same time, give a concise view of the financial health of the company. Financial statements are records of the financial activities of the of a business enterprise or any other entity (Kimmel, Weygandt & Kieso, 2010). The aim of a preparing a financial statement is to track and present the financial activities of a business entity in a way that enables users of such records to as much as possible, understand the financial position of the of the company at any given time.Financial statements include; the balance sheet, income statement, cashflow statement and statements of shareholders equity. These four set of financial statements are considered to be the basic financial statements typically produced by profit making companies (U.S...
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...1 To purchase this visit here: http://www.nerdypupil.com/product/acc-290-week-1-discussion-question-1/ Contact us at: nerdypupil@gmail.com ACC 290 WEEK 1 DISCUSSION QUESTION 1 ACC 290 Week One – DQ #1 What are the four basic financial statements? What is the primary purpose of each of the four basic financial statements? In your opinion, which financial statement is the most important? Explain why. How would the financial statements be useful to managers and employees? How would the financial statements be useful to investors and creditors? Home Work Hour aims to provide quality study notes and tutorials to the students of ACC 290 Week 1 Discussion Question 1 in order to ace their studies. ACC 290 WEEK 1 DISCUSSION QUESTION 1 To purchase this visit here: http://www.nerdypupil.com/product/acc-290-week-1-discussion-question-1/ Contact us at: nerdypupil@gmail.com ACC 290 WEEK 1 DISCUSSION QUESTION 1 ACC 290 Week One – DQ #1 What are the four basic financial statements? What is the primary purpose of each of the four basic financial statements? In your opinion, which financial statement is the most important? Explain why. How would the financial statements be useful to managers and employees? How would the financial statements be useful to investors and creditors? Home Work Hour aims to provide quality study notes and tutorials to the students of ACC 290 Week 1 Discussion Question 1 in order to ace their studies. ACC 290 WEEK 1 DISCUSSION QUESTION 1 To...
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...Financial Statements Leslie Johnson January 31, 2010 ACC/280 Principles of Accounting Accounting is a systematic proocess that identifies, records, and communicates the economic events of an organization to interested users (Weygandt, 2008). The financial information gathered is used to determine a company’s financial status and provide reports and insights needed to make sound financial decisions. The purpose of accounting is to provide economic financial information for investor, creditors, and other external users. Accounting identifies and records all activities that effect the organization financially. Accounting is a means of communicating the numbers. The three basic activities in accounting identify, records, and communicate the economic events of an organization to interested users (Weygandt, 2008). One example of an economic event is telephone service is provided by Verizon. Once the company has identified the economic event, it is recorded in order to provide a history of the organizations financial activities. The accounting process includes the bookkeeping function that usually involves only the recording of economic events (Weygandt, 2008). Collectively, accounting involves the entire process of recording, identifying, and communicating economic events. Management uses accounting information in planning, controlling, and evaluating business operations. Other groups that use accounting information are tax authorities, regulatory...
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...Institute of Education (Pty) Ltd is registered with the Department of Higher Education and Training as a private further and higher education and training institution under the Further Education and Training Colleges Act, 2006 (reg. no. 2009/FE07/003, prov. to 31/12/2014) and the Higher Education Act, 1997 (reg. no. 2007/HE07/002). © The Independent Institute of Education (Pty) Ltd 2013 - Page 1 of 82 IIE Module Guide ACCO230 DID YOU KNOW? Student Portal The full-service student portal provides you with access to your academic administrative information, including: an online calendar, timetable, academic results, module content, document reviews, financial account, and so much more. Module Guides or Manuals When you log into the Student Portal, the Module Information page displays “Module Purpose” and “Textbook Information” including online “Module Guides or Manuals” for each module for which you are registered. Supplementary Materials For certain modules, electronic supplementary material is available to you via the Supplementary Module Material link. Module Discussion Forum The “Module Discussion” Forum may be used by your lecturer to discuss with you any topics related to any supplementary materials such as ICE, etc. To view, print, and annotate these related PDF documents, download Adobe Reader by following the link below: www.adobe.com/products/reader.html © The...
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