ACT 280 Week 1 Financial Accounting

ACT 280 Week 1 Financial Accounting - Financial Accounting...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Financial accounting can be defined as the language of business. There are two main purpose of accounting the first is to report and assist business, non profit organizations and individuals to record transactions for the purpose of preparing performance report that reflect current financial position of the entity and the second is to reflect the performance of the company and then based on that assist the end users in there decision making process. So we can say that the main purpose of accounting is recording, classifying, summarizing, and interpreting. There are four basic types of financial statement: (i) The Balance Sheet (ii) The Income Statement (iii) The statement of cash flow, and (iv)The statement of shareholder’s equity The balance sheet: The balance sheet can be defined as the summery of asset, liabilities and equity of an entity usually at the end of every financial year. It is also known as the statement of financial position. The balance sheet includes the asset (Current as well as fixed), liability (current liability and long term liability) and the share holder’s equity as use of funds and source of fund category. It shows the net worth of the entity by showing the asset and liability in its statement. The income statement:
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 4

ACT 280 Week 1 Financial Accounting - Financial Accounting...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online