...The four basic financial statements are income statement, retained earnings statement, balance sheet, and statement of cash flow. Each of these statements has specific value for internal and external users to use them for. These statements can help a company determine how well they are doing in the market. By evaluating the information given in these statements there may even show potential for a company to grow. The income statement shows a company’s revenues, income, and expenses. With this statement the company can determine what their net worth is and determine if they are earning income or if they are losing money. The retained earnings statement uses the net income found from the income statement, and shows what portions of that income the company will retain for its expansion and what portion of that income it will distribute to shareholders. A balance sheet covers assets and liabilities such as creditor loans. In the balance sheet assets must balance with liabilities. Finally, the statement of cash flow covers a company’s income and expenses and shows where cash was obtained, either through general revenue from sales or loans from creditors, and it also covers how the cash was used during a period of time. These statements may be useful to managers and employees in several ways. If managers hold stock within the company they would be interested in maintaining a higher profit margin in order to keep their stock up. They can use the information to help determine...
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...Accrual vs. Cash Basis Accounting XXXXXXXXXX ACC290 XXXXX, XX, XXXX XXXXXX XXXXXX Introduction In business, there are many different forms and standards to accounting. These standards are governed by rules, laws, regulations and accurate accountability of a particular business account. There are some general differences between general and commercial basis accounting principles, also differences between accrual and cash basis accounting. Those differences will be looked at here. General and Commercial Basis Accounting Principles According to Wikipedia.com, generally accepted accounting principles (GAAP) refer to the standard framework of guidelines for financial accounting used in any given jurisdiction; generally known as accounting standards or standard accounting practice. These include the standards, conventions, and rules that accountants follow in recording and summarizing and in the preparation of financial statements. Hubpages.com discusses commercial accounting, also known as profit accounting, defining that it performs primarily by profit and loss. The reporting for a profit organization is directed to the investors. ("The Principles Of Commercial Accounting And Fund Accounting", 2011). Accrual vs. Cash Basis Accounting According to the readings, accrual basis accounting is defined as in which companies record, in the periods in which the events occur, transactions that change a company's financial statements, even if cash was not exchanged. In other words...
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...Financial Statements Paper ACC290 January 2, 2013 David Aloyan The main goal of most businesses is to gain profit and have less spending costs all together. If a business is not making money, the owner of that business really has no reason to keep that business open. It is both a waste of time and a waste of money if there is no profit to be made. Many businesses deal with money all the time but how do they really know how much profit was made at a certain point of the year or a certain time of the month. If a business cannot keep track of the money coming in and the money being spent it cannot keep track of whether it is making money or loosing money. Fortunately, we have a solution to keep track of the money our businesses are making and the money our business are spending. Our Solution to our questions about cash flow is financial statements. Financial statements can be beneficial to internal and external sources that are interested in making a business grow. There are four basic financial statements that makeup the backbone of financial accounting. These four statements are balance sheets, income statements, retained earnings statements, and statements of cash flow. A balance sheet is used to show your business’s assets, what your business owns, and the business’s liabilities, what your business owes. It can paint a picture of your business’s finances at a specific point in time. An income statement shows how successful the business was for a certain season...
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...assignment acc/290 discussion questions acc/290 dqs acc/290 week acc/290 appendix acc/290 final acc/290 learning acc/290 ... ACC 290 Final Examwww.scribd.com/doc/89721525/ACC-290-Final-ExamCached You +1'd this publicly. Undo Apr 17, 2012 – purchase the solution to final Exam http://studentoffortune.com/question/1468561 /ACC-290-Wk-5 1) Which financial statement is used to ... ACC 290 - Student of Fortunestudentoffortune.com/question/1336889/ACC-290Cached You +1'd this publicly. Undo Jan 18, 2012 – ACC 290 Week 4 Learning Team Financial Reporting Kroger ... ACC 290 Week 4 - Chapter 4 P-4.8A Pro window washing.xlsx (33K) ACC 290 ... ACC 290 Week 3 Individual Summary Question One ...studentoffortune.com/.../ACC-290-Week-3-Individual-Summary-Qu...Cached You +1'd this publicly. Undo ACC 290 Principle Of Accounting I - Entire Class - Latest Exercises Upto May 2012. This tutorial ... ACC 290 Week 2 Individual Problems and Exercises.doc ... acc 290 - Student of Fortunestudentoffortune.com/question/1337562/Cached You +1'd this publicly. Undo ACC 290 Week 4 Individual Assignment Week Four Problem ... ACC 290 Week 4 Learning Team Financial Reporting Problem, Part 1.doc (34K) (Preview) ... ACC 290 - Student of...
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...Financial Statements ACC290 November 5, 2012 Lori McKinney Financial Statements Whether a company is a small, mom-and-pop organization or a multi-billion dollar corporation, financial statements are an integral part of the company’s financial operations. There are four basic financial statements, each of them related. Changes on one statement will affect the other but no single statement will tell the complete story of how the company is performing financially. Because of this, it is important for users to understand which reports are pertinent to them and know how to interpret the information in those reports. Four Basic Financial Statements The four basic financial statements are the income statement, retained earnings statement, balance sheet, and statement of cash flow (Kimmel, Weygandt, & Kieso, 2010). These statements provide a summary of all the financial activity for a company during a particular period for use by both internal and external users. Purpose of Financial Statements The first of the four statements is the income statement. The income statement summarizes a company’s revenue and expenses for an identified period of time, showing the over-all success or failure during the period. The income statement details the sources of revenue such as revenue from sales, investments, and services provided as well as the amounts received. The statement also shows the expenses for the company. Expenses include salaries, benefits, and supplies. The income statement...
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...comparisons between the International Financial Reporting Standards (IFRS); which is designed to be a common global language for business affairs and the Generally Accepted Accounting Principle (GAAP); which refer to the standard framework of guidelines for financial accounting. There are certain ways that the format of a statement of financial position under the IFRS often differ from the balance sheet presented under the GAAP. At a minimum the statement of financial position shall include items that present the following information: property, plant, and equipment, investment property, intangible assets, financial assets, investments accounted for using the equity method, biological assets, inventories, trade and other receivables, cash and cash equivalents, total assets classified as held for sale to include disposable group classified as held for sale in accordance with the IFRA 5, trade and other payables, provisions, financial liabilities, liabilities and assets for current tax, deferred tax liabilities and assets, and non controlling interests presented within equity. Unlike the IFRA, the GAAP does not prescribe a standard format. The United States Security Exchange Commission (SEC) regulation does not require precise like items to appear on the face of the balance sheet. The IFRS and GAAP conceptual frameworks hold opposing views from the objective of financial reporting but are very comparable in the way of thinking that all financial reporting should have the quality...
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...NiCE Working Paper 09-108 April 2009 Quality of Financial Reporting: measuring qualitative characteristics Ferdy van Beest Geert Braam Suzanne Boelens Nijmegen Center for Economics (NiCE) Institute for Management Research Radboud University Nijmegen P.O. Box 9108, 6500 HK Nijmegen, The Netherlands http://www.ru.nl/nice/workingpapers 1 Abstract We construct a compound measurement tool to comprehensively assess the quality of financial reporting in terms of the underlying fundamental qualitative characteristics (i.e. relevance and faithful representation) and the enhancing qualitative characteristics (i.e. understandability, comparability, verifiability and timeliness) as defined in ‘An improved Conceptual Framework for Financial Reporting’ of the FASB and the IASB (2008). The operationalization of these qualitative characteristics results in a 21-item index. Using 231 annual reports from companies listed at US, UK, and Dutch stock markets in 2005 and 2007, we test our compound measurement tool on internal validity, inter-rater reliability (Krippendorff’s alpha) and internal consistency (Cronbach’s alpha). Our findings suggest that the measurement tool used in this study is a valid and reliable approach to assess the quality of financial reports. The measurement tool contributes to improving the quality assessment of financial reporting information, fulfilling a request from both the FASB and the IASB (2008) to make the qualitative characteristics operationally...
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...controls Taxation Documents on display Purchases of equity securities by the issuer and affiliated purchasers Fees and charges payable by a holder of ADSs Fees and payments made by the Depositary to the issuer Called-up share capital Administration Annual general meeting Exhibits BP Annual Report and Form 20-F 2010 83 Directors and senior management 84 87 Directors and senior management Directors’ interests 89 Corporate governance 90 105 106 106 107 108 Board performance report Corporate governance practices Code of ethics Controls and procedures Principal accountants’ fees and services Memorandum and Articles of Association 141 Financial statements 142 Consolidated financial statements of the BP group 150 Notes on financial statements 228 Supplementary information on oil and natural gas (unaudited) PC1 Parent company financial statements of BP p.l.c. 111 Directors’ remuneration report 112 Part 1 Summary 114 Part 2 Executive directors’ remuneration 120 Part 3 Non-executive directors’ remuneration UNITED...
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...Health Care Cost Study: Financial Statements The Patton-Fuller Community Hospital has been serving the community since 1975; so handling financial statements are familiar with them. The discussion in this paper will enlighten what is the difference of audited and unaudited statements, the relationship between revenue sources and expenses on performance, and the effect of revenue sources on financial reporting. It will also discuss is the hospital’s revenues and expenses grouped for planning and control. The audited and unaudited balance sheets from the Patton-Fuller statements differ by the net allowance of bad debts and retained earnings, or unrestricted fund balance. The audited version of the balance sheet states that 2009 has a net allowance of $11,757 for bad debts and a net allowance of $7,533 for bad debts in 2008. The unaudited version of the balance sheet states that 2009 has a net allowance of $10,757 and a net allowance of $6,777 for bad debts in 2008. The difference between the two allowances may be because audited numbers require accuracy. The unaudited numbers may be estimations; however, the audited statements require exact numbers. The audited and unaudited balance sheets from the statements also differ by retained earnings, total liabilities, and equity. The audited balance sheets show $125,564 in retained earnings for 2009 and the unaudited balance sheets show $126,564 in retained earnings for 2009. This results in a thousand dollar difference...
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...ACCOUNTING (STATEMENT ANALYSIS) 222/525 PRACTICE TEST SOLUTIONS SECTION A SECTION B Multi-Choice Questions True/False Questions | 1. |E | | |1. |T | | 2. |E | | |2. |F | | 3. |E | | |3. |T | | 4. |C | | |4. |T | | 5. |E | | |5. |T | | 6. |D | | |6. |F | | 7. |C | | |7. |F | | 8. |D | | |8. |T | | 9. |B | | |9. |T | | 10. |C | | |10. |T | | 11. |E | | |11...
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...of “enhanced” standards on publicly traded companies intended to ensure financial reports were being reported accurately to the public. Among others, these enhanced standards include: • Companies must maintain adequate controls over financial reporting. • Companies must provide a statement regarding the method the company uses for evaluating their control over financial reporting controls. • Companies must disclose any material weaknesses in their accounting controls. • Auditors must issue an attestation regarding the managements own assessment of its financial reporting capabilities. Why the new enhanced standards are necessary Congress passed the Sarbanes-Oxley Act of 2002 in reaction to accounting scandals involving well-known companies like Enron, WorldCom, and Tyco that were inaccurately reporting financial information over a period of years. Through close relationships with accounting firms that amounted to conflicts of interest, these companies were able to perpetuate their fraudulent financial reporting. One noted accounting firm – Arthur Anderson – was forced to shut down because of the scandal, though several other accounting firms were also implicated. The story of Enron’s demise and the financial fraud that lead to it is perhaps the most well-known of the group, illustrates the real reason behind the Sarbanes-Oxley Act. “Enron's nontransparent financial statements did not clearly depict its operations and finances with shareholders and...
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...TO: TO WHOM IT MAY CONCERN FROM: SUBJECT: CITY OF DENVER CO, CAFR, ANALYSIS OF MD&A DATE: The following memo highlights 4 interesting aspects of the Comprehensive Annual Financial Report of the City of Seattle Washington for Calendar Year January 1st – December 31st 2009. The complete report can be found following this link: http://www.seattle.gov/cafrs/2009/default.htm 1. On page #2 (and on the relevant statements on pages 10 and 11) of the Management’s Discussion and Analysis, it is noted that the fund financial statements are broken down by governmental funds, proprietary funds, and fiduciary funds. The governmental funds are broken down into general, special revenue, debt service, capital projects and permanent funds. It is interesting to note that the city of Seattle has identified 3 major governmental funds that are presented separately in the governmental funds balance sheet and statement of revenues, expenditures, and other changes in fund balances. The major funds are the General Fund, Transportation Fund, and Low-Income Housing Fund. The general fund should always be reported as a major fund. Other individual funds should be reported as major funds if, 1) total assets, liabilities, revenues, expenditures of that fund are at least 10% of the corresponding total for all funds of that category and 2) total assets, liabilities, revenues, expenditures of that fund are at least 5% of the corresponding total for all governmental and enterprise funds combined. For...
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...potential investment. The documents that need examining are the income statement, balance sheet, and cash flow sheets. This analysis will aid in the determination of the financial health of Whole Foods Market. A comparison of Whole Foods Market with two competitors—United Natural Foods and Hain Celestial Group—will be completed. Technology is important within a business environment; therefore, the strength or weakness that Whole Foods Market has will also be discussed along with globalization. The paper will conclude with a benchmarking analysis of Whole Foods Market against United Natural Foods and Hain Celestial Group. Financial Health Every public company trading on the New York Stock Exchange is required to file quarterly and annual statements regarding financial records. To analyze the financial health of Whole Foods Market as a potential investor, I could access the United States Security and Exchange Commission (SEC) filing dated January 15, 2012. The key factors of a financial statement according to William Nickels, James McHugh, and Susan McHugh, (2010), are 1. The balance sheet that reflects the financial strength and health of the company on a specific date 2. The income statement, which summarizes revenues, cost of goods, and expenses (including taxes), for a specific period and highlights the total profit or loss the firm experienced during that period. 3. The statement of...
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... Reporting Practices & Ethics Paper In the health care environment financial practices and ethical care finance is very important to produce successfully organizations. In the health care industry and in any business, ethical and financial practices are adopted to increase the organization value and consumer confident as well as protected the services or products provide by the organization and maintain the organizations brand name. With the cost of providing health care services, patient’s way of payment for these services and the environment in which those patients reside and receive those services are important elements that affects care. This is why financial management and financial reporting is also essential factors for any organization. Most organizations have mission statements, values and visions created to uphold the utmost integrity, honesty and respect for not only the community it serves but also the employees. Financial management can create a positive atmosphere of teamwork or a negative one of turmoil and failure. That is why it is very important for health care organizations to abide by the four elements of financial management. Four Elements of Financial Management The four elements of financial management are planning, controlling, organizing and directing, and decision making. Planning is when the financial manager identifies the steps that must be taken to accomplish the organization’s objectives. The purpose...
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...ordinary audit of financial statements is the expression of an opinion on: | | the fairness of the financial statements | | CORRECT | | | the accuracy of the financial statements | | | | | the accuracy of the annual report | | | | | the balance sheet and income statement | | | 2. The auditor's best defense when material misstatements are not uncovered is to have conducted the audit: | | in accordance with auditing standards | | CORRECT | | | as effectively and as reasonably possible | | | | | in a timely manner | | | | | only after an adequate investigation of the management team | | | | | | | | | | | | | 3. Which of the following statements is most correct regarding errors and fraud? | | An error is unintentional, whereas fraud is intentional. | | CORRECT | | | Fraud occurs more often than errors in financial statements. | | | | | Errors are always fraud and fraud is always errors. | | | | | Auditors have more responsibility for finding fraud than errors. | | | 4. Which of the following statements is true of a public company's financial statements? | | Sarbanes-Oxley requires only the CEO to certify the financial statements. | | | | | Sarbanes-Oxley requires only the CFO to certify the financial statements. | | | ...
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