financial REPORTING

Topics: Financial statements, Generally Accepted Accounting Principles, Balance sheet Pages: 55 (8301 words) Published: November 18, 2013
Page of Contents
Introduction…………………………………………………02 TASK 01………………………………………………...03 – 22 T1.1………………………………………………...03 - 11 T1.2…………………………………………………12 -22

TASK 02…………………………………………………23 - 36 T2.1…………………………………………………23 - 27 T2.2………………………………………………….28 - 31 T2.3………………………………………………….32 - 36

TASK 03.........................................................................37 - 47 T3.1………………………………………………….37 - 43 T3.2………………………………………………….44 - 47

TASK 04…………………………………………………..48 - 61 T4.1…………………………………………………..48 – 56 T4.2…………………………………………………..57 - 61

Reference…………………………………………………..62

Introduction
Accounting is an information system that identifies records and communicates the economic events of an organization to the interested users in form of financial statements. These interested users of accounting information can be divided in two forms- internal and external. This leads to a division of accounting nature Managerial accounting and financial accounting. The key difference between financial and managerial accounting is that financial accounting is aimed at providing information to parties outside the organization, whereas managerial accounting information is aimed at helping managers within the organization make decisions.  Financial accounting gathers and summarizes financial data to prepare financial reports such as balance sheet and income statement for the organization's management, investors, lenders, suppliers, tax authorities, and other stakeholders. Managerial accounting is concerned with the use of economic and financial information to plan and control many of the activities of the entity and to support the management decision-making process In regarding of this Assessment is based on the financial accounting. So management accounting concepts and principles are not relevant for on this lesson.

TASK 01
T1.1
Definition of Financial Statements
According to the American Institute of Certified Public Accountants, financial statements reflect “a combination of recorded facts, accounting conventions and personal judgments and the judgments and conventions applied affect them materially”.

Types of financial report
Financial information takes many different forms. For the purposes of the Statement, it has been categorized as follows.

Special purpose financial reports
Financial information prepared by the entity itself, persons who have the authority to obtain the information they require to meet their needs. Regulatory returns, tax returns and financial reports prepared for bankers are examples of such reports.

General purpose financial reports
Financial information that, although prepared by the entity itself, is not in the form of a special purpose financial report. Such reports comprise: Example: annual financial statements and the financial statements contained in interim reports, introduction announcements and summary financial statements. General purpose financial statements are generally referred to in the Statement after this simply as ‘financial statements’.

Objectives of Preparing Financial Statements

The prime objective of accounting is to ascertain how much profit or loss a business organization has made during any accounting period and to determine its financial position on a given date. Preparing final accounts or financial statements serve this purpose. After the preparation of Trial Balance, the next level of work in accounting is called “Final Accounts” level. The general purpose financial reporting is to provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity. Those decisions involve buying, selling or holding equity and debt instruments, and providing or settling loans and other forms of credit. Many existing and potential investors, lenders and other creditors cannot...

References: http://www.readyratios.com/reference/accounting/international_financial_reporting_standards_ifrs.html,
http://www.investinganswers.com/financial-dictionary/financial-statement-analysis/generally-accepted-accounting-principles-gaap-992
http://www.investopedia.com/terms/g/gaap.asp
http://dilipchandra12.hubpages.com/hub/Accounting-Assumptions
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