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Financial Accounting and Reporting - Doc

   

Added on  2020-01-21

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Financial Accountingand Reporting

TABLE OF CONTENTSIntroduction......................................................................................................................................3Task 1...............................................................................................................................................31.1 Describing the different users of financial statement and their needs...................................31.2 Explaining the legal and regulatory framework influences on financial statements.............41.3 Assessing the implications for users......................................................................................51.4 Explaining different laws/regulations are dealt with by accounting and reporting standards......................................................................................................................................................63.1 Explaining the information needs of different groups vary ..................................................63.2 Preparing financial statements for publication by a sole trader, partnership and limitedcompany.......................................................................................................................................7Task 2...............................................................................................................................................8Task 3...............................................................................................................................................84.1 Calculating accounting ratios to assess the performance and position of the ABC Ltd........84.2 Preparing a report incorporating and interpreting accounting ratios, including suitablecomparisons.................................................................................................................................9Conclusion.....................................................................................................................................10References......................................................................................................................................12

INDEX OF TABLESTable 1: Fundamental principles towards preparing Financial statements......................................8Table 2: Format of income statement..............................................................................................9Table 3: Format of profit and loss statement.................................................................................10Table 4: Format of Cash flow statement........................................................................................10Table 5: Format of Balance sheet..................................................................................................11Table 6: Calculation of Ratios.......................................................................................................12

INTRODUCTIONFinancial accounting is a specialized branch of accounting and it is concerned with thesummary, analysis and reporting of monetary transactions for decision makers (Macve, 2015).This involves preparation of the monetary statements for those people, who interested inreceiving such information. Financial statement is a process in which statements are produced,which discloses the economic position of company to management, investors, stakeholders andto the government (Francis and et.al., 2015). This report is based on the different cases, users offinancial statements and their needs are described. The legal and regulatory influences on thesestatements and the implication for the users are explained. Format of the monetary statements fora variety of businesses and a consolidated balance sheet and profit and loss a/c for a single groupof company is prepared. Incorporating and interpreting of accounting ratios are covered in thisreport.TASK 11.1 Describing the different users of financial statement and their needsThere are many users of financial statements which are produced by the company (Usersof Financial Statements, 2015). As it provides useful information to the users, some of these are:Investors- They are more interested to know the company's profits and also the securityof their investments. With the help of the company's past financial statements, investor canestimate the future returns (Armstrong and et.al., 2015). By this they can determine whether toinvest or not and can also access the ability of the firm to pay good returns. Employees- They also need to know the stability and profitability of the company andthe ability of the company to provide remunerations, employment opportunities, retirementbenefits etc in the future (Weygandt, Kimmel and Kieso, 2015). The major interest of employeesis to know the current financial position of the company so they can plan their future in theorganization. Customers- As customers are dependent on the company for specialized supplies and forthis they need to know whether company will continue supply them in the future or not (Barth,2015). They need information of the profitability and the sales of the company to know thecontinuance of the business.

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