Various Accounting Cycle - Report
28 Pages2413 Words53 Views
Added on 2020-07-22
Various Accounting Cycle - Report
Added on 2020-07-22
ShareRelated Documents
FINANCIAL ACCOUNTINGPRINCIPLES
INTRODUCTIONAccounts are related by an individual in order to record each and every transactions intheir business as their basic aim is to consider all the key factors in their business. This reportemphasizes on various accounting cycle which involves preparing journal entries till thepreparation of all the financial statements.a)1. Explain financial accountingFinancial accounting is regarded as specialised sector on which every business focuses inorder to determine its financial performance over a specific period. The emphasises of this typeof accounting lies on improving the current financial performance of an enterprise as financialposition of an entity will be determined easily wit he helps of this particular accounting style. Anemployer will be easily records all the transactions of its business in this type of accountingstatements which helps in preparing financial statements of the business in order to compareactual and standards framed by the business. Standard forms of financial statements prepared byan enterprise owner includes income statements and balance sheet which stresses on the existingfacts and figures in order to generate desired outcome within a given span of time. Role of thebusiness get increases with the emergence of external business environment changes whichenhances the existing performance of the business entity.Financial statements are regarded as one of the important source of external informationas this reflects the true performance of an entity over a certain period in order to enhance theoverall performance. Deviation in the current performance of an entity can be easily find outwith the help of all the financial accounts prepared by an enterprise with the help of financialaccounting principles. Discrepancy in the financial statements will be rectified by emphasises onthe desired aims and the objectives of the business over a particular time period.2. Explain the acts related to financial accountingFinancial statements are prepared in an entity in order to reflect the financial performanceof an entity. Various regulations will be followed by an enterprise owner in order to preparevarious financial statements. Greater emphasises will be given by an entity owner in order toreflect transparent business conditions of an enterprise. Accounting standards will be adopted byan enterprise owner while preparing financial statements as the basic motive of the business is to1
present its competencies in front of the external stakeholders. Performance of an entity arecategorised into qualitative and non-qualitative that will be helpful for an entity owner in order torectify all its weaknesses that helps in accomplishing all the goals and the objectives within agiven span of time.Accounting standard will be used by the owner in order to increase the quality of all theinformation included in the financial statements of the business enterprise. Different itemscovered in the financial statements are separately treated in the books of accounts which helps inenhancing the overall business performance of an entity within a given span of time. Deliveringright output is the major concern of the business which relates loyalty among all the users in theexternal business environment.Schedules 6 will be used in order to prepare balance sheet and income statements inparticular format in order to present true financial information in meeting various needs andexpectations of al the users of the business. Balance sheet formats differ from one business toanother as every business structures adopted different formats in order to communicate importantinformation from one end to another. Use of various formats will be transparent and legallyrecognised to convey important financial information to the stakeholders as their interest isassociated with each and every business decisions.3. Describe accounting rules and principlesBasic rules of accounting is often regarded as the survival pillars of accounting withoutwhich no entity will perform accounting of all the transactions of the business in determining thefinancial performance of an entity. Three rules of accounting is also related with the accountsprepared in the business such as nominal and real accounts related in the business enterprise.Debit the receiver and credit the giver, debit all expenses and losses and credit all income andgains and last accounting rule is debit what comes in and credit what goes out. These three basicaccounting rules will be used as direct weapon in order to record each and every transactions ofthe business to ascertain the financial performance of an entity as the journal entries are createdin order to prepare the financial statements as the accounting cycle will be followed by an entity.Traditional accounting principles are required to be followed by an entity in order toimprove its existing business efficiency as the transactions are properly treated in the books ofaccounts whose effects is properly shown on the financial performance of an enterprise owner.2
Financial accounting standard board has launched various guidelines and accountingprinciples in order to enhance the overall business performance of an entity in order to achievedesired aim and the objectives of the business enterprise within a given span of time. GAAP is anacronym that stands for generally accepted accounting principles whose primary motive is toapply various principles in improving the recoding procedures of all the business transactionsproperly in the books of accounts.4. Describe conventions and concepts relating to consistency and material disclosureOne of the accounting policy used in improving the current business conditions of thebusiness enterprise includes consistency principle which suggest that once an accounting policywill be used in the business will e followed throughout the ear without changing the same. Forexample, SLM selected by an entity as method of depreciation will be consistently followed in awhole year as any changes made in the current policy will account to disclosure to the financialaccounts. Changes incurred in the business can be of two types such as both material and non-material changes takes places in the business. Changes takes places in the business will bedisclose in the end of the financial account if the current change is material to the business.Material change refers to a change that affect the overall financial performance of an entity overa certain period.3
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
A Study on Financial Accounting Concepts in Business Organizationlg...
|26
|5367
|167
(Doc)Management Accounting System | Reportlg...
|16
|4501
|141
Accounting for Business: Concepts and Qualitative Characteristics of Financial Reportslg...
|6
|1242
|440
Discut Four Prescriptions Containing AASB 10 Consolidated Financial Statementslg...
|4
|526
|273
Analysis of Financial Reportinglg...
|13
|2757
|48
Imda Tech Ltd - An Enterprise Management Projectlg...
|18
|4492
|410