When it comes to Accounting, there are four types of financial statements. These statements are critical when managing a business. The four types of financial statements are Statement of Financial Position, Income Statement, Statement of Changes in Equity, and Cash Flow Statement. Statement of Financial Position is the company’s financial position of an entity at any given time. The Statement of financial Position is composed of three things, which are assets, equity, and liabilities. Income Statement is also known as “The Profit and Loss Statement,” is a report that underlines the company’s financial performance. It puts the report in terms of net profit or a company’s loss over a specified time period. Statement of changes in Equity records the movement in the owners’ equity over a period of time. To determine the owner’s movement, data is derived from the dividend payments, gains or losses recognized directly in equity, shared capital matters reimbursed during the time period, and Net Profit or loss during the period as stated in the income statement. Cash flow statement is the movement in bank and cash balances over a period. This movement is broken down into sections. These sections are the Investing Activities, Operations Activities, and Financing Activities. I believe that the cash flow statement is most effective in communicating the financial health of an organization. Think about it. This statement shows the cash flow from the projects of your business. The cash flow statement shows the flow of money in your inventory and it shows the activities when rising and repaying capital and shared debt composed with payments of interest and dividends. The overview of where your money is going and how it’s doing is more import...
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...implement internal controls to sort out who can access what. It would be strictly on a need to know and if you don’t have access you would need to have your supervisor request a form to change your rights. Implementing back ground checks for all employees that are hired into my company. There would also be a drug test screen at random for my employees. This would be my preventive measures to prevent theft or fraud.
References:
http://www.allbusiness.com/prevent-employee-theft-fraud/16704398-4.html
http://www.docfinity.com/save-time-money-and-aggravation-six-benefits-of-automating-your-payables-process/
http://smallbusiness.chron.com/four-financial-statements-typically-produced-company-20725.html
...tigation I would talk to staff about how we can rebrand our company and rebuild our image. The potential of scandal damaging our public image is inevitable but the more damage control that is done as soon as the scandal is opposed the more likely my company has a chance to survive.
...we would do or not do when attempting to start, build, or grow a business. We would not use extrinsic desires to motivate my employees. Instead we would attempt to be a Theory Y manager. As a Theory Y manager we would take more time in the hiring and recruitment process to find the best available Type I employees. We would be much more hands off, allowing for more leeway for our employees to get their jobs done. Allowing for employees to come in to work and leave when they please. Also, we would incorporate a 20 percent concept, where all employees are allowed to work on anything they want inside the company for 20 percent of their work time. Whether that is attempting to create a new product or idea, or just improving on something already available. These strategies to managing have the ability to improve productivity, job satisfaction and psychological well-being.
Develop and/or track indicators that measure key activities 2. Assist in establishing internal management standards in addition to SOPs 3. Ensure quality of service and quality controls 4. Offer recommendations for change wherever appropriate 5. Provide an opportunity for staff to raise any matters of professional concern 6.
In other words the cash flow statements informs investors where money is coming as well as going; making sure everything is accounted for. The terminology used in book referred to it as the inflows and outflows. The cash flow statements can be provided yearly or quarterly. After observing an example of a statement, I noticed that cash flow statements are separated by financing, operating, and investing activities. Cash flow statements are very similar to a balance sheet. The only difference is that the cash flow statements displays the variations or fluctuations in the balance sheets between periods. That’s the basic principle of cash flow statements. The change in cash between periods is explained by the changes in all of the other balance sheet accounts, and each balance sheet account is related either to an operating activity, an investing activity, or a financing activity (Fraser & Ormiston, 2012). The four parts of a statement of cash flows are cash, operating activities, investing activities, and financing activities. From my research and studies, cash flow statements characteristics are sales and expenses or inflows and outflows. Some examples of inflows or sales are cash sales and credit sales. Some examples of outflows or expenses are operating costs and
Private and public accounting has long been discussed and disputed in regards to financial reporting. Since the Financial Accounting Standards Board (FASB) was created in 1973, accountants have called for different accounting regulations for private and public accounting sectors, as private companies do not have the resources to meet the complex requirements of public companies. Private companies currently are not required by law to issue annual or quarterly financial statements (James, 2012). Private companies do, however, have the option to apply the U.S. Generally Accepted Accounting Principles (GAAP), cash basis, or accrual accounting to their financial statements (James, 2012).
I would create a positive environment where the employees would feel comfortable to solicit their ideas. I would encourage the employees to express their ideas. I would give constructive feedback to them when they share their
Financial statements are essential to the success of a small business. Financial statements have a value that goes far beyond preparing tax returns or applying for loans, and can be used as a roadmap to steer you in the right direction and help you avoid costly breakdowns (U.S. Small Business Administration [USSBA] 2014).
The Purpose of Financial Statements The financial statements of a business are used to provide information about the status of the business, set performance targets and impose restrictions on the managers of the firm as well as provide an easier method for financial planning. The financial statements consist of the Profit and Loss Account, Balance Sheet and the Cash Flow Statement. There are four areas of information, which we can collect from a company's financial statements. They are: Ÿ Profitability - This information comes from the Profit and Loss account. Were we can compare this year's profit with the previous years.
“Behind every good business is a great accountant.” Considered by many to be language of business, accounting in all reality is a vague term. They are many types of accounting each with its own certifications and requirements. They are three main types of accountants first is the public accountant or CPA. This is a person who works for a public accounting firm, whose job is to go and evaluate the status of a company through auditing financial statements. Next, is a cooperate accountant. In cooperate accounting an accountant works inside a major cooperation, for example Ford or Chevy, and evaluates the status of the company through creation and analysis of the financial statements. Finally are tax accountants, who focus on studying the tax code
At a glance, accounting might appear as a repetitive cycle of preparing and examining financial statements. However, a brief exposure to accounting has taught me how chaotic it can be for accountants. An accountant captures and represents the information of businesses. By reviewing financial operations, an accountant helps a business run efficiently. This profession can be intellectually stimulating and rewarding. After learning about accounting, I cannot help but be interested and desire to work toward a degree in accountancy. In my studies, I have learned accountants require a plethora of qualities to be successful. And to mature from a student to a professional, I must resolve to strengthen my weaknesses. There is much I must learn and achieve, but a degree in accounting is well worth the time spent.
The statement of cash flows reports a firm’s major cash inflows and outflows for a period. This statement provides useful information about a company’s ability to generate cash from operations, maintain and expand its operating capacity, meeting its financial obligations, and pay dividends. There are three types of activities to look at in this statement, which are cash flows from operating activities, investing activities, and financial activities (3, 2005).
The revenue/cost period-: Revenue and the cost period in accounting that the company get income from normal business activities. It’s referred to normal business income that the company got by selling their product and service.
Cash flow statements provide essential information to company owners, shareholders and investors and provide an overview of the status of cash flow at a given point in time. Cash flow management is an ongoing process that ties the forecasting of cash flow to strategic goals and objectives of an organization. The measurement of cash flow can be used for calculating other parameters that give information on a company 's value, liquidity or solvency, and situation. Without positive cash flow, a company cannot meet its financial obligations.
ABC LTD COMPREHENSIVE INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2012 NOTE 2012 Revenue 2 828,500 Cost of sales 3 (460,000) Gross profit 368,500 Other income 4 2,500 Operating expenses 5 361000 Profit before income tax 10000 Income tax expense (30%) 3,000 Profit for the year 7000 Other comprehensive income change in revaulation surplus 38500 Other comprehensive income for the year, net of tax 38500 Total comprehensive income for the year 45500 ABC LTD STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 30 JUNE 2012 NOTES 2012 ASSETS Current assets Cash and cash equivalents 6 100500 Trade and other receivables 7 45,200 Inventories 8 87700 Other current assets 9 7000
"The objective of financial statements is to provide information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions."[Financial statements should be understandable, relevant, reliable and comparable. Reported assets, liabilities and equity are directly related to an organization's financial position. Reported income and expenses are directly related to an organization's financial performance.