Financial accounting and reporting 1
Cost Accounting is an internal reporting system for an organisation's own management for decision making. Much like signs in math: two positive numbers are added and two negative numbers are also added.
For example, if business is not proved to be remunerative or profitable, the cause of such a state of affairs can be investigated by the management for taking remedial steps.
Sign-up now! The profit and loss account helps the management and different stakeholders in taking rational decisions. It may also be regarded as a transformative process in that it turns the raw data recorded in bookkeeping into useful information.
Financial accounting and reporting 1 syllabus philippines
Financial statements display the income and expenditure for the company and a summary of the assets, liabilities, and shareholders' or owners' equity of the company on the date to which the accounts were prepared. If expenses exceed revenue then it is said that the business is running under loss. Free statement of participation on completion of these courses. Free course Financial accounting and reporting 1. Financial accountants produce financial statements based on the accounting standards in a given jurisdiction. Interactive feature not available in single page view see it in standard view. Versus cost accounting[ edit ] See also: Cost accounting Financial accounting aims at finding out results of accounting year in the form of Profit and Loss Account and Balance Sheet. It is only when there is one positive and one negative opposites that you will subtract. These are all good answers, and there are probably many others. Data lack meaning until they have been processed into meaningful information. Financial accounting reports the results and position of business to government, creditors, investors, and external parties. In this context, accounting is sometimes referred to as an accounting information system AIS or in short, accounting system. Objectives of Financial Accounting Systematic recording of transactions: basic objective of accounting is to systematically record the financial aspects of business transactions i. The profit and loss account helps the management and different stakeholders in taking rational decisions. Retained earnings come from the retained earnings statement, prepared prior to the balance sheet.
These recorded transactions are later on classified and summarized logically for the preparation of financial statements and for their analysis and interpretation. Business ownership can be in the form of a sole proprietorshippartnershipor a corporation. For UK business entities, this date can be any date in the year and does not have to coincide with a calendar year, though this is not necessarily the case elsewhere.
For example, the first accounting period for companies in the UK must be more than six months, but no more than 18 months.
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