FINANCIAL ACCOUNTING

Financial Accounting

Abstract

The paper discusses the finance report in detail as to what is the purpose of financial planning in the business. Why, is that business makes record of the financials of the company and who are the users of it. It than discusses function and role of auditors in term of internal and external auditing. The paper also discusses the different elements of financial statements. It also discusses role of GAAP in the making of financial statements. Further, down the paper we have made the financial statement of Facebook with the financial analysis of the company. In the end, we have discussed the debt and equity relationship in the business.

Table of Contents

Introduction3

Scope of the financial accounting4

Financial Accounting Users4

Potential Shareholder or Existing shareholders5

Lenders of the company5

Customers5

Suppliers and creditors6

Analyst6

Government and Regulatory authorities6

Role of Internal and External Auditors6

The Role of External Auditor and its responsibility6

The Role of Internal Auditor and its responsibility7

Elements that make up the financial statement7

GAAP8

Ratios9

Financial Analysis9

Sources of finance available to Business10

Equity and debt relationship10

Reference11

Financial Accounting

Introduction

The work done in the world is done by organization who gather resources and make the people work in close proximity and co-ordination with each other. These people work to achieve single objective and goal. Thus while accomplishing these jobs; resources and services are utilized, these resources are like material, labor, services, building, equipments and land. These resources are to be financed with cash thus many stakeholders become a part to it. Thus, the management of these organizations needs to keep a record of the revenue and expenses related to these operations. Since this information is initially available with the management of the company, thus financial accounting comes into effects that provide this information to other stakeholders of the organization. The specialized branch of accounting that keeps track of the company financial transaction is called financial accounting .They are prepared with the help of standardized guideline under the International accounting standards (Anthony & Marcia 2005 pp 15). Under it the transactions are recorded, summarized, and then presented in the financial statements under different heads like income statement, balance sheet and cash flow etc.

The issuing of financial statement is regularly done by the companies. These accounting statement are considered external because the main recipients are external users. This information also reaches to competitors, labor organizations, customers and investment firms who use it accordingly. The main purpose of this information is not to report the value of the company, but to provide considerable information to external parties so that they can assess the value of the companies using their assumptions.

Scope of the financial accounting

The scope of the financial accounting is effectively directing and controlling the organization human resource and materials. Keeping systematic records of the company resources like the land, machineries and other assets of the company. Providing the opportunity for special control and functions. The scope is also related to the making of decision concerning the use of limited resources in an efficient manner, determination of goals and objectives, and identification of crucial decisions, which ...