According to Marsha (2014), the main purpose of cash flow statement is to inform information about the change in cash receipt and cash payment during the period. On the one hand, there are several reasons why cash basic is well accepted by financial economists. The primary benefit of cash-based accounting is simpler to understand than other accounting methods (Tudor and Mutiu, 2006, p.2). Due to the cash rule, users are less likely to be confused due to the variety of financial information between revenues and expenses so effort to match an expense with the revenue it generates it’s not necessary. (Tudor and Mutiu, 2006, p.2).
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.
It consists of Customer billing statements, Sales orders, purchase Requisitions, Sales analysis reports, Register checking, Vendor invoices, general ideas, payroll information, timekeeping and inventory data, tax information. This data can be used to preparing the accounting statement and reports. (Fontinelle, 2017).Accounting Information System is used for to produce the external stories related to the financial statement, supported through routine activities, Decision Support and Planning and Control, Implementing internal control. Accounting Information roles are classified into External Auditor, Tax Accountant, Consultant and Internal Auditor, Business Analyst, Budget analysts, Financial Analyst, controller and Accounting Clerk. It is discussing the future, and current role of Accounting Information system is analyzing by accountant responsibility and financial
Supporters said that, fair value are usually claim for the facts of the market price or estimate price on current situation and sometimes they have admit there will be no active market or no market at all, thus no real price. Moreover, fair value accounting also means as which lowers its value in the market and at the same time it decline the quality of a company’s own debt. Fair value accounting is an additional momentum to a destructive downside overshoot. From the FASB framework concludes that, “Fair value reflects losses that have been incurred, it does not cause losses.” In a downward cycle, this appears untrue. I believed that there are many solutions or approach that we have beside fair value accounting that can be used to solve the problem arise in the financial accounting such as based on historical cost, current cost, realisable value and present value.
Financial Accounting is a field of accounting concerned with a company’s financial transactions. It uses standardized accounting guidelines to record, summarize and present the transactions to mainly external users periodically by means of Financial Statements. Creditors and other lenders like banks and other financial institutions, Government Authorities, Prospective Investors, Customers, Competitors and Regulatory Authorities are some of the External Users who may use these Accounting information for various decision making purposes. Managerial Accounting also referred to as Cost Accounting is a branch of accounting that helps in identifying, analyzing interpreting, preparing and communicating both Financial and Non-Financial information
The higher the quick ratio, the more the company will be able to repay its current assets without selling its long term assets. However, in case of Blackwell Automotive Company, the quick ratio is quite low which shows that the liquidity position of a company is not good. Days’ Sales Outstanding Ratio Days’ sales outstanding ratio is a ratio which measures the number of days taken by the organization so as to collect the cash from credit sales. The advantages of Days’ Sales Outstanding Ratio are: - It helps the organization to know the efficiency of the account receivable department. - It helps the investor in evaluating how fast the firm can collect the cash from its credit sales so as to pay its liabilities effectively.
Labour is compensated by money, therefore the exchangeable value of all products is measured by the quantity of money, rather than the quantity of labour. This forms the bullion theory of value and the labour theory of value. The Bullion theory is dependent on the value of gold and solver which is sometimes more volatile than other commodities and harder to get. Therefore, it is not a very reliable theory to judge the value of a commodity. On the other hand, the labor theory works with equal quantities and value of labor, thus, making it more reliable to use because labour wages are decent benchmark for price levels as they have a nominal and real price.
[Finance] » Blog Archive » The Dangers Of The Payday Loans Industry[Finance]PayDay Loan, Insurances, Debt Settlement, Auto LoanApr 1Filed under: PayDay Loan; Tagged as: check, credit, industry, LoanPayday loans are a popular and fast growing means of borrowing money. Their popularity is due to the ease with which the process works as well as its very short processing time. A customer writes a personal check for the desired cash, plus a fee for the payday loans lender. The borrower and payday loans lender both know the borrower has insufficient funds to cover the check. The payday loans lender then advances the cash and keeps the fee, usually about $20 per $100 borrowed.
Implementation of GAAP is done through disclosure and measurement principles (Bampton and Cowton, 2013, p.557). Disclosure principles explain the actual figures and other necessary information useful to be presented the financial statements. Measurement principles determine and recognize the basis and timing of items that are to be in the accounting cycle and lead to an impact on the financial statements. In summary, GAAP is concerned with; economic activity measurement, the time to measure and record such measurements, the disclosures surrounding this activity and preparing and presenting of financial statements in a summarized form. In the absence of GAAP, it would be hard for investors and creditors to make decisions since different companies would be free to choose what financial
The Single Index Model also greatly reduces the computations, since it eliminates the need to calculate the covariance of the securities within a portfolio using historical returns and the covariance of each possible pair of securities in the portfolio. With this equation, only the betas of the individual securities and the market variance need to be estimated to calculate covariance. Hence, the index model greatly reduces the number of calculations that would otherwise have to be made for a large portfolio of thousands of