Financial Accounting Mba Assignment

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Student ID: 7608756

FACC Assignment
FACC/Jul11/1
Ryan Marc Gonsalves

Ryan Marc Gonsalves MBSW 60127 FINANCIAL ACCOUNTING FACC/JULY11/1

Student ID: 7608756

Table of Contents
Table of Tables .................................................................................................................... 3 Table of Figures ................................................................................................................... 3 Introduction and Purpose ................................................................................................... 4 Question One (A): Financial Statements ............................................................................. 5 The Usefulness of Accounting Information ........................................................................ 6 Cash Flow Statement .......................................................................................................... 7 Operations ...................................................................................................................... 8 Investing .......................................................................................................................... 8 Financing ......................................................................................................................... 9 Net Cash and cash Equivalents ....................................................................................... 9 Question Two (A): Mr Wang’s Business ............................................................................ 10 Income Statement ........................................................................................................ 10 Statement of Financial Position .................................................................................... 12 Question Two (B) .......................................................................................................... 14 Appendices........................................................................................................................ 15 Appendix 1: HSBC Holdings Cash Flow Statement ........................................................ 15 Bibliography ...................................................................................................................... 16

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Ryan Marc Gonsalves MBSW 60127 FINANCIAL ACCOUNTING FACC/JULY11/1

Student ID: 7608756

Table of Tables
Table 1: Users of Financial Information .............................................................................. 5 Table 2: Characteristics of Accounting Information ........................................................... 7

Table of Figures
Figure 1: Mr Wang's Income Statement 30 June 2011 ..................................................... 10 Figure 2: Mr Wang's SOFP 30 June 2011 .......................................................................... 12

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Ryan Marc Gonsalves MBSW 60127 FINANCIAL ACCOUNTING FACC/JULY11/1

Student ID: 7608756

Introduction and Purpose
The first part of this paper is to introduce and discuss the stakeholders of financial statements and the way in which the statements are used. We will identify and discuss the contrasting information needs of the user groups and the elements that make accounting information useful. Finally, drawing from examples of HSBC Holdings, we will review why the cash flow statement is a relevant financial tool. The final part of the paper is a case study to develop the SOFP and Income statement for Mr Wang’s business. We end with an explanation on depreciation and doubtful debts.

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Ryan Marc Gonsalves MBSW 60127 FINANCIAL ACCOUNTING FACC/JULY11/1

Student ID: 7608756

Question One (A): Financial Statements
Accounting is concerned with collecting, analysing and communicating financial information (Atrill & McLaney, 2011). There are several users of financial statements, these are summarised in table 1 below:...
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