Introduction to Financial Accounting & Key Financial Statements Define Accounting Accounting is the process of identifying, measuring, recording and communicating economic information to assist users to make decisions. “Accounting is the language of business” – Warren Buffett Users are able to make better, well-informed decisions with the correct and sufficient information provided * The CEO salary is regarded as an expense on the financial statement as it is a deduction and it reduces the company’s
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Financial Statements Paper University of Phoenix Principles of Accounting 280 David Fewkes September 13, 2010 Financial Statements Paper Accounting consists of three basic activities-it identifies, records, and communicates the economic events of an organization to interested users (Weygandt, p. 4). Managers and Chief Executive Officer’s use financial statements to promote sustainability and track financial decline. These statements are also used by auditors, creditors, and the Securities
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highly ranked tennis player who would like to start a company to produce and market apparel she designs. She also expects to invest substantial amounts of money through Balik and Kiefer. DellaTorre is very bright, and she would like to understand in general terms what will happen to her money. Your boss has developed the following set of questions you must answer to ex- plain the U.S. financial system to DellaTorre. a. Why is corporate finance important to all managers? Corporate finance provides the
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understand whether profit status influences performance. “Financial performance is measured by the entity’s ability to generate profit after tax, the accumulated change in retained profits and the entity’s ability to generate positive operating cash flows. These metrics were selected as they are standard techniques employed in the private sector when evaluating the performance of firms” (Aulich. C & Hughes. M, 2013). Financial performance with different ownership may be overseen in different aspects
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financial statements and what does each one tell us? 2. What is the basic structure of the BS and IS? 3. Why is cash flow more important than Accounting profits? 4. What three factors make cash flow not equal to net income? 5. What are OCF, CFFA, CFTC and CFTO? 6. What is the cash flow identity and how does it relate to the BS identity? 7. Why might a firm’s OCF not all be available for distribution to investors? Chapter 3 1. How do we compare cash flows that occur
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Introduction Financial Statement: It is a formal record of the financial activities of a business, person, or other entity. In British English—including United Kingdom company law—a financial statement is often referred to as an account, although the term financial statement is also used, particularly by accountants. For a business enterprise, all the relevant financial information, presented in a structured manner and in a form easy to understand, are called the financial statements. They typically
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most experienced investor can get lost in the jungle of a company’s financial statements. But basic knowledge of the balance sheet, cash flow statement, and income statement go a long way. With just a little effort, you can: • Calculate basic ratios to measure profitability, liquidity, and solvency • Make better, more informed investment decisions Financial Report Basics Financial reports, or financial statements, are documents that summarize a company’s financial performance. All publicly
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-‐-‐> first 'me First IFRS financial statements -‐-‐> first annual financial statements -‐-‐> (in which) -‐-‐> an en'ty adopts IFRSs IF the first IFRS financial statements cover two annual periods
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cycles. Bookkeepers and accounting clerks are generally the ones that record the entries and prepare statements for financial managers and staff accountants to approve. The first step of the accounting cycle would be to identify and analyze the transaction and events that need to be accounted for. Even though the generally accepted accounting principles (GAAP) has guidelines there are no rules to what events or transaction a company is required to record. A company should record every sale or
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investment, credit, and similar decisions. An accounting system is the means by which a company records and stores the financial and managerial information from its transactions so that it can retrieve and report the information in an accounting statement. A doubleentry system standardizes the method that a company uses to record changes in its accounts resulting from various transactions or events. For each transaction or event that a company records, the dollar amount of the debits entered in all
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