Weekly Reflection Paper
Week 2 Reflections
Weekly Reflection
Week 2 Reflections
In our first week we learned the relationship between financial statements and the components of the annual report. These reports give you an overall look at the company and their financial information. The financial statement can be used by creditor, potential employees, possible investors, etc. to help them determine if they want to do business with the company. Collectively as a class, the discussion was very interesting, as we talked about the importance of different sections of the annual reports and which parties would be interested to read the information.
We also discussed the importance of accuracy in the annual reports. If the information is found not credible it …show more content…
I was intrigued by the expense recognition principle and the revenue recognition principle. Based on our textbook, Financial Accounting, Sixth Edition, it describes the expense recognition principle as “expenses matched with revenues in the period when efforts are expanded to generate revenues” (p.165). My understanding of this is whenever an organization has money going out or coming in, such as paying debts or receiving income, they should report the changes. The textbook goes on to further say about the revenue recognition principle, “revenue recognized in the accounting period in which it is earned” …show more content…
So far, I am on a good path learning the basics of accounting. I have learned how accounting affects business and how it allows organizations to identify cash inflows and outflows. Without accounting there would be no way to accurately predict cash flows, or future operations. One of the most important things I learned is to remember accounting equation. "The accounting equation is the basis upon which the double entry accounting system is constructed. The accounting equation is: Assets = Liabilities + Shareholders ' Equity. The assets in the accounting equation are the resources that a company has available for its use, such as cash, accounts receivable, fixed assets, and inventory." (Merritt, C) I can appreciate the importance of a financial statement knowing that it is a valuable tool for businesses, as it provides the financial information that investors and creditors use to determiner a company 's financial performance. I also learned that financial statements vary, and focus on different areas of an organization’s financial
Weekly Reflection
Week 2 Reflections
In our first week we learned the relationship between financial statements and the components of the annual report. These reports give you an overall look at the company and their financial information. The financial statement can be used by creditor, potential employees, possible investors, etc. to help them determine if they want to do business with the company. Collectively as a class, the discussion was very interesting, as we talked about the importance of different sections of the annual reports and which parties would be interested to read the information.
We also discussed the importance of accuracy in the annual reports. If the information is found not credible it …show more content…
I was intrigued by the expense recognition principle and the revenue recognition principle. Based on our textbook, Financial Accounting, Sixth Edition, it describes the expense recognition principle as “expenses matched with revenues in the period when efforts are expanded to generate revenues” (p.165). My understanding of this is whenever an organization has money going out or coming in, such as paying debts or receiving income, they should report the changes. The textbook goes on to further say about the revenue recognition principle, “revenue recognized in the accounting period in which it is earned” …show more content…
So far, I am on a good path learning the basics of accounting. I have learned how accounting affects business and how it allows organizations to identify cash inflows and outflows. Without accounting there would be no way to accurately predict cash flows, or future operations. One of the most important things I learned is to remember accounting equation. "The accounting equation is the basis upon which the double entry accounting system is constructed. The accounting equation is: Assets = Liabilities + Shareholders ' Equity. The assets in the accounting equation are the resources that a company has available for its use, such as cash, accounts receivable, fixed assets, and inventory." (Merritt, C) I can appreciate the importance of a financial statement knowing that it is a valuable tool for businesses, as it provides the financial information that investors and creditors use to determiner a company 's financial performance. I also learned that financial statements vary, and focus on different areas of an organization’s financial