Personal Accounting University of the People Personal Finance 2204 Professor Nathan Rondeau Personal Accounting Accounting is the system through which a comprehensive recording, analysing and assessing of financial transactions for an individual or entity occurs. These records are in turn summarized into reports that may be used internally/ personally or externally by interested economic agents (www.ivestopedia.com ) The three products of accounting or bookkeeping procedures that are most useful in personal financial planning are namely income statements, cash flows and balance sheets. An income statement is a statement that summarizes expenses for a certain period against income with the end result being either a net surplus income or deficit.
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
Accounting cycle is the financial process starting with recording business transactions and leading up to the preparation of financial statements. This process demonstrates the purpose of financial accounting to create useful financial information in the form of general purpose financial statements. Beside that, the sole purpose of recording transactions and keeping track of expenses and revenues is turn this data into meaning financial information by presenting it in the form of a balance sheet, income statement, and cash flows. The accounting cycle is a set of steps that are repeated in the same order every period. The culmination of these steps is the preparation of financial statements.
(a) Analysis of financial statements is considered to be an effective tool for analyzing the operating and financial performance of an organization. The analysis of financial statements is useful for taking practical economic decisions by various users. There are different types of tools available for the analysis of the performance of an organization. However, the horizontal and vertical analysis is a very widely used technique for developing a better understanding of financial strengths and weakness of an organization. For the purpose of this assignment, as a Financial Analyst for Middle East Venture Capital LLC, I have chosen Oman Fisheries Co. S.A.O.G.
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
• Utilize these three steps as you define the researchable questions. III. Analysis • This section is regarded as the most critical step in writing an effective accounting memo by bringing together the required facts of the research, any supporting authoritative literature, and an accountants overall evaluation before forming a conclusion. • Analysis includes information from relevant guidance, along with an accountant’s own words about how the guidance is applicable. • The memo should contain enough authoritative guidance that the user will not need to perform additional research in the Codification.
Particularly well experiences accountants work with AIS means to check the high-level accuracy of company financial transactions and to keep the records in safety manner. To make financial statement easiest way and easy to understand for all of them. AIS is one of the real-time application processes. The Data will be included in the AIS; it depends on the Nature of the Business. 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.
Under US GAAP, Financial reporting should provide information that is useful to present and potential investors and creditors and other users in assessing the amounts, timing, and uncertainty of prospective net cash inﬂows to the related enterprise. (SFAC No. 1, para. 37) It is interesting to note that this is precisely the information that one would need to calculate the value of an enterprise. Thus, in setting accounting principles, the FASB appears to be emphasizing the valuation role of accounting information over other uses.
After preparing the adjusted trial balance, the accounting cycle will continue with preparing the financial statements. Preparing the financial statements is the most important steps in the accounting cycle. Balance sheet, income statement, statement of changes in equity and statement of cash flows will be prepared in order to provide useful financial information to the external users. The income statement or known as profit and loss statement is a report that display the income and expenses of the company during the accounting period. The income statement also served to calculate the net income or loss of a company by deducting the total expenses from the total income and this calculation shows investors and creditors the overall profitability of the company as well as how efficiently the company is at generating profits from total
Income data (experiences, estimates of sales, fund rising, membership etc and planned activities). Data come from previous budgets, estimates, experience of others and public available statistics. I was also able to identify the main uses of accounting and these are as follow: Information All organizations need to keep records of their financial transactions so that they can access Information about their financial position, including: summary of income and expenditure, the outcome of all operations, assets and liabilities. Legal requirement There is often a statutory obligation to keep and publish accounts and donor agencies almost always require audited accounts as a condition of grant aid. Future planning Although financial accounting information is historical (i.e.