Financial Reporting Flashcards
Accounting
A system for recording information about a company’s transactions- to provide summary statements of a company’s financial position and performance for those who need it.
Number and types of accounting books
3- Financial, tax and managerial.
Financial Accounting
Standardized reports for external stake holders.
Tax Accounting
IRS rules for computing payable tax.
Managerial Accounting
Custom reports for internal decision making.
Who is responsible for Financial Accounting?
Management.
The Audit committee of the board of directors oversees the management’s process.
Equity
The difference between a company’s total assets and total liabilities.
Stock holders’ equity
The amount of equity a corporation’s owners have left after liabilities or debts have been paid.
What are the required financial statements?
Balance sheet
Income Statement
Statement of Cash flows
Statement of Stockholders’ Equity
Balance Sheet
Financial position (list of resources and obligations) on a specific date
Income Statement/ Profit and loss statement
Revenue, expenses, gains, and losses of a company during a particular period.
Results of operations over a period of time using accrual accounting (i.e.,
recognition tied to business activities)
Statement of Cash Flows
Sources and use of cash over a period of time.
Statement of Stockholders’ equity
Changes in stockholders’ equity over a period of time.
