Financial accounting, ROCE, current liabilities, profit quality

Financial accounting, ROCE, current liabilities, profit quality

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

View Full Document Right Arrow Icon
Financial accounts - overview There are two main forms of accounting information: (1) Financial Accounts, and (2) Management Accounts Financial Accounts - A Definition Financial accounts are concerned with classifying, measuring and recording the transactions of a business. At the end of a period (typically a year), the following financial statements are prepared to show the performance and position of the business: Also known as the income statement. Describing the trading performance of the business over the accounting period Statement of assets and liabilities at the end of the accounting period (a "snapshot") of the business Describing the cash inflows and outflows during the accounting period Additional details that have to be disclosed to comply with Accounting Standards and the Companies Act Description by the Directors of the performance of the business during the accounting period + various additional disclosures, particularly in relation to directors' shareholdings, remuneration etc Financial accounts are geared towards external users of accounting information. To answer their needs, financial accountants draw up the profit and loss account, balance sheet and cash flow statement for the company as a whole in order for users to answer questions such as: - "Should I invest my money in this company?" - "Should I lend money to this business?" - "What are the profits on which this company must pay tax?" Company Law Requirements for Financial Accounts Every UK company registered under the Companies Act is required to prepare a set of accounts that give a true and fair view of its profit or loss for the year and of its state of affairs at the year
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

Financial accounting, ROCE, current liabilities, profit quality

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