Accrual accounting and Cash flow accounting are critical factors which contribute to judgments and decision-makings that lead to a successful business. It is debatable whether accrual accounting is preferred to cash flow accounting, while there are some financial economists are in favor of using cash flow basic to report. This chapter will first give a foundation of accrual and cash flow accounting, then discuss the advantages as well as drawbacks of both methods and give the conclusion which type of accounting is suitable to record. Accrual accounting is an accounting that revenues are recognized when sales have been made and expenses are recorded when they are incurred, even the cash receipt from the revenue or the cash payment related to
In order to make sure that operation goes smoothly multiple denominations are provided with enough change to last for the shift While ensuring the float both parties need to agree on the total amount and sign for it as verification The recipient must sign the document that shows that the float was taken.Also, it might be required to sign the issuer The float is issued, once the recipient has signed Than the staff transport the float to the cashiering station and place it in the till drawer where a logical arrangement of notes and coins is used. For instance, the largest denomi-nation can be placed on the left side and in descending order to the right Than the staff close and lock the till drawer 5. List 6 types of transactions handled by the receptionist:. -Deposits
Week 8 June 1 – Accounting Statements and Cash Flow The topic that I have learnt today is on accounting statements and cash flow. The statement of cash flows contains the operating, investing and financing which are primary in business activity. Inflow is when the money are received and not necessarily earned. Whereas, outflow is when the cash is paid and not necessarily incurred. The information you get from the cash flow statement can help evaluate the company’s ability to meet its obligations.
Cash flows provide more information about cash assets listed on a balance sheet and are related to net income on the income statement but not exactly the same, And so on. No one financial statement tells the complete story. The three financial statements together can provide a very powerful information for investors or
Break-even units is the number of units required to cover fixed costs for a period of time. Cost volume profit analysis simplifies the calculation of breakeven in break-even analysis, and more generally provide simple computation of target income sales. It simplifies analysis of short run trade-offs in operational decisions. Cost volume profit analysis enables managers to be capable of answering specific realistic questions needed in business analysis. Questions such as what the company's breakeven point is support manager’s project with spending forecasts and how production will contribute to the success or failure of the
to regulate and make the standards of bank control operations more realistic, increasing the banks financial positions has increased the interest of banks boards of directors and made appropriate financial decisions , banks capital more effective in the control , because of the agreed style of components and elements of financial institutions , everyone has the ability to create a quick idea . criteria for obtaining a safety degree are applied to reduce risk , disadvantages , not to control , bring workers animate experience weak , the presence of tension and conflict because of participating with others , lack of production due to differences vision in teamwork , as for the disadvantages first than , The balance between risk and return leads to an increase in the price of securities and reduces the cost of capital . second , Leads to greater variation in the distribution of incomes and wealth. third , The emergence of continuous economic fluctuations . fourth , Use the exorbitant money to advertise and advertise in order to promote goods and they actually do not express the truth .
As the capital structure changes, there is a definite effect on the balance sheet of the company. There is financial flexibility by using stock. Payment solely by stock might reduce the profitability ratio of the company and if it is by cash, the company will show higher liquidity ratio. Not all firms have liquid cash to complete the transaction so they deal by involving both cash and stock as the risk will be divided and hence it is the most attractive method of financing the
Even though the accounts receivable ratio is often a good indicator of a company's payments collecting ability, it could be misleading. It is an average and because of that customers that carry high balances and pay quickly could skew the average, concealing a problem with the majority of accounts with small balances. ▪ Accounts receivable aging report – lists unpaid customer invoices by date ranges. The purpose of this report is to show the business owner what receivables need to be dealt with more urgently because they have been overdue longer. Companies can use an aging report to determine whether it is taking on too much risk, because past due tend to get more difficult to collect the older they become.
According to McCulley (2009), financing has got creative through the rise of securitization vehicles which has got momentum just before the financial crisis. Now the term represents a broader range of entities and activities. Moreover, ‘market-based financing’ instead of ‘shadow banking’ is preferred by some authorities and market participants. The term ‘shadow banking’ is sometimes deemed as too pejorative to characterize such an important and extensive part of the financial system despite the risks and lack of transparency involved in its activities (FSB, 2013). Traditionally, credit intermediation between savers and borrowers is executed in a single institution, a bank, which collects deposits and provides loans.
However, that also are opportunities for us. Get the financial information from our last period income statement and balance sheet, at beginning we only use alone company operation profit to measure operate situation. Thought the challenge became deeper we learnt use market share and present asset value to evaluate the performance of our company. Same as Rome was not built in a day, financial awareness cultivation need accumulate abundant working experiences. For management business, financial awareness not only reflect the external phenomena of financial affairs correctly, but also correctly reflect the essence and law of financial affairs.