The Financial Information And Its Users

In accounting there is much to be learned, about the financial aspects of a business. In the past five weeks I have learned the importance of financial reports and how they relate to the success of an establishment. These reports may include balance sheets and income statements, which help accountants and the public grasp the overall financial condition of a company. The information in these reports is really significant to, managers, owners, employees, and investors. Managers of a business can take and deduce financial

“The accounting system generates the information that satisfies two reporting needs that coexist within an organization: financial accounting and managerial accounting” (Schneider, 2012, ch 1.1, para 1). Managerial accounting is the process of preparing reports and accounts required by management to make business decisions for daily, weekly, monthly, and yearly projects. Financial accounting is the branch of accounting that organizes accounting information for presentation to interested parties outside of the organization. Financial accountants produce annual reports for external

 Managerial accounting is defined as the activities carried out in a firm to provide its managers and other employees with financial and related information to help them make strategic, organizational, and operational decisions.

Financial statements provide documentation of a company’s financial history for a set timeframe. One of the financial statement used by investors, creditors, and mangers is the balance sheet. The second statement used by accountant’s income statement, which is also important to shareholders. The third statement is the retained earnings statement, and the fourth financial statement is the statement of cash flows. Each financial statement has a different purpose and shows different aspects of the company’s finances. However, these financial statements are integrated and work together to

Financial statements are generated easily from transferring information from the journal and ledger records to the trial balance, and then transferring these records into the financial statements. Given the purpose and importance of General Journal, General Ledger, Trial Balance, and Financial Statements, it very clear that these flows or work together in a successful accounting sector. The first step is recording the day-to-day or chronological transactions of a business (general journal) which is subsequently transferred to the general ledger that summarize all transactions occurring within a business to ensure that the total of all debit balances match the total of all credit balances. After the general ledger is being generated, the trial balance is prepared after all the transactions for the period have been journalized and posted to the General Ledger usually for a given period or month that list and total of all the debit and credit accounts for that period and usually a check and balance for the

According to Will S, Ray H, & Eric E.N. (2009), management accounting is a branch of accounting that is concerned with providing information to managers who direct and control the firm’s operations. Management directing function seeks to effectively use both the human and raw material wealth of a firm to achieve organizational set objectives on routine basis. Controlling function is the art of tele-guarding the activities of the organization to consistently fall in line with set objectives. Management accounting achieves this function through effective budgeting.

Feedback: Management accounting is the preparation and use of accounting information systems to achieve the organization's objectives by supporting decision makers inside the enterprise. LO 4

3. Managerial Accounting deals with procuring of data for the organisation's management i.e. to serve the internal users with necessary accounting information to carry out the management tasks of planning, organising, actualising and controlling. " Management Accounting is the presentation of accounting Information in such a way as to assist management in creation of policy and in the day to day operations of an undertaking". 4. Financial Management deals with the process adopted by an organisation for taking financial decisions through analysing and interpretation of financial data for meeting the organisations objectives.

The financial statements are then prepared. The financial statement is the most important outcome of the account cycle. In this process the income statement is prepared first, followed by the statement of owner’s equity, and then the balance sheet. The statement can be prepared directly from the adjusted trial balance, the end-of-period spreadsheet, or the ledger. The net income or net loss shown on the income statement is reported on the statement of

This article encompasses several different audiences. Perhaps the most significant one is the Financial Accounting Standards Board. The authors believe that the FASB’s conclusions revolved around incorrect interpretations about the simplicity of the indirect method and the complexity of the direct method. In consideration of this assumption the author’s believe that FASB should readdress the issue of reporting requirements concerning the statement of cash flows. Another large audience for this article is the field of accounting education. The authors conclude that accounting

Management accounting provides the other managers information on the business decisions that allow them to keep their management and control functions equipped. Management accounting is used within an organization and is

Author Atul K. Shah, in his study aims to illuminate the influences and constraints on creative accounting providing new insights of understanding financial reporting. The dominant purpose of this paper is to identify the key

According to the Chartered Institute of Management Accountants (CIMA), Management Accounting is "the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information used by management to plan, evaluate and control within an entity and to assure appropriate use of and accountability for its resources. Management accounting also comprises the preparation of financial reports for non management groups such as shareholders, cr->ors, regulatory agencies and tax authorities" (CIMA Official Terminology)

Management accounting is designed to be more of an internal control than an external control. What is meant by an internal control is managerial accounting is designed more for a work center or specific department within a business. Reports are created to assist managers in determining what the best path would be for their specified work area. The accountants that are focused in managerial accounting will be generating daily, weekly, and/or monthly reports assisting the managers to gain insight on any changes that need to be made whether it’s with employee hours to be used or pricing of inventory for profits. The reports that are developed simply to help provide a pathway guiding the manager’s decisions. Managerial accounting doesn’t simply apply to lower level management. Upper management will also use the reports from managerial accountants to identify if there are any trends in sales whether up or down, budget requirements, consolidation reports, and any studies that may have been accomplished. The big difference between managerial accounting and financial accounting is managerial

The accounting cycle starts off with collecting all the documents that are linked to the business financial transactions. These documents are items such as bank statements, cash on hand, and any expenses that have occurred. Collecting data for a fiscal period plays a substantial role for all business to begin to understand how all transactions will have an impact on the health of their company. The second step is where the financial transactions start to come together, after reviewing all the data for the period, the business is ready to begin entering the information into the journals