SUBJECT NAME: MGT 430
STUDENT NANE: SAIMA BOSTAN
ROLL NO: 042
QUESTION NO 1:
IDENTIFY THE MAJOR FINANCIAL STATEMENTS AND OTHERS MEANS OF REPORTING.
The statements prepared to show the financial position of the business is known as financial statements. These statements provide financial information of an equity to internal and external users and decision makers.
MAJOR FINANCIAL STATEMETS:
The three main financial statements are as follow:
1: Income statement
2: Balance sheet
3: Statement of cash flows
1:- INCOME STATEMENT:
The statement that shows the expenses and revenue of an entity or corporation is called income statement. It includes the "Trading and a Profit and Loss A/c" which is prepared to ascertain the net profit or net loss of the business for a specific accounting period.
2:- BALANCE SHEET:
The balance sheet is prepared to know the amount of assets, liabilities and owner's equity on a particular date. It is also known as statement of financial position. It shows the economic resources of an organization referred to as assets, and the claims that creditors and owners have against assets. Economic obligations of an organization are called liabilities, and owners' claims are referred to as owners' equity or capita.
3:- CASH FLOW STATEMENT:
This statement provide information on the change in the corporation's cash and cash equivalent during the same period of time as income statement.
Financial reporting is a broader concept than financial statement that refers to all information that is available to investers,creditors and other external users. Financial reporting helps decision makers in utilizing searce economic resources efficiently .
OTHER MEANS OF FINANCIAL REPORTING :
Financial reporting other than financial statements may take various forms.
The president’s letter or supplementary schedules in the corporate annual report, management discussion and analysis, prospectuses, reports filed with government agencies, news releases, management’s forecasts, and descriptions of an enterprise’s social or environmental impact are examples of other means of financial reporting. Financial reporting is only source of information needed by those who made economic decisions about business enterprises. Financial reporting focuses primarily on providing information about assets, ,liabilities,sales and earnings.
IDENTIFY THE MAJOR OBJECTIVES OF FINANCIAL REPORTING.
OBJECTIVES OF FINANCIAL REPORTING:
The objectives of financial reporting are as follows:
1: The most general objective of financial reporting is to provide information in such a manner that will be useful in making investment and credit decisions and similar resource allocation decisions. 2: Financial reporting should provide information to help assess the amounts, timing and uncertainty prospective net cash inflows to the related enterprise. 3: The third and most specific objective is to provide information about the economic resources of the entity means its assets and the claim to those resources (its liabilities and equities) and how these resources and claims change over the time. 4: The objective of financial reporting is to provide information about an enterprise's economic resources, obligations and owner's equity. 5: Financial reporting should provide information about liquidity, solvency and cash flow of an enterprise. This information relates how an enterprise obtains and...