Accountings for manager Essay Example | Topics and Well Written Essays - 2500 words

Accountings for manager - Essay Examplefiscal descriptions are prepared with the intention of providing information that female genitals be used by investors for taking decisions relating to investments. At the end of every monetary year crease concerns prepare Profit and Loss a/c and Balance Sheet.The P & L a/c reflects the result of the business operations for a period of time and remainder pall gives a drumhead of the assets and liabilities of a business undertaking on a particular date. However, these two statements fail to explain real major transactions that take place during the year. Balance sheet is a statutory statement. It does not shrewdly focus on those major transactions that took place behind the balance sheet change. One privy draw inferences from the balance sheet about major financial transactions, only after comparing the balance sheet of two accounting periods. Thus, it has to prepare a statement explaining the reason for change in financial position fro m one accounting period with another.A coin flow statement is a financial statement, which shows inflows and outflows of silver of a firm. It is a description of the sources and applications of funds in business activities during an accounting period. It gives explanations to changes in the balance sheet figures mingled with two accounting periods. Thus, managers can easily understand the changes in hard gold position between two accounting periods. It is also known as statement of changes in financial position.... A cash equivalent is that investment which has the maturity of three months or less from the date of acquisition. From the equity investments are commonly excluded, unless they are in substance a cash equivalent (e.g. preferred shares acquired within three months of their stipulate redemption date). Bank overdrafts which are repayable on demand and which form an integral part of an enterprises cash management are also included as a component of cash and cash equival ents. (Summary of internationalist Financial Reporting Standards 2008).The main principles specified by IAS 7 for the preparation of cash flow statement are as follows 1. Operating activities are the main revenue-producing activities of the enterprise. So operating(a) cash flows include cash received from customers and cash paid to suppliers and employees IAS 7.14. 2. Investing activities are the acquisition and disposal of long-term assets and other investments that are not considered to be cash equivalents IAS 7.6. 3. Financing activities are activities that alter the equity capital and borrowing social organisation of the enterprise IAS 7.6. 4. Interest and dividends received and paid may be classified as operating, investing, or backing cash flows, provided that they are classified consistently from period to period IAS 7.31. 5. Cash flows arising from taxes on income are normally classified as operating, unless they can be specifically identified with financing or investing activities IAS 7.35. For operating cash flows, the direct method of presentation is encouraged, but the indirect method is acceptable IAS 7.18. (Summary of International Financial Reporting