Purpose of Financial Accounting Statements Pursuant to US GAAP
Assignment Overview
The topic for this case is about defining and learning about the purpose of financial accounting statements pursuant to US GAAP (Generally Accepted Accounting Principles). This assignment has two parts.
1. An essay
2. A table
Case Assignment
Part 1
Review the three components in the background material to answer three questions about accounting and its purpose.
What is accounting?
What is the importance of accounting?
What are corporate financial statements?
The essay should be 300 to 500 words.
Part 2
The background information for the module covers the basic concepts, but for more ideas go to the optional background source principlesofaccounting.com. The site also offers multiple videos that you may find relevant. You may also use other sites for ideas to complete the table. Do not forget to add a creative title for the table and reference the sources used.
Create a table with four columns as shown below and complete the last three columns to express your thoughts on the purpose and significance of financial statements.
https://www(dot)principlesofaccounting(dot)com
Include part 1 and part 2 in your submission.
Write an essay.
Submit a completed table as shown above. Do not forget to add your own title for the table and add references. Do not copy definitions, but explain your thoughts in your own words and with examples, if appropriate. Write 3–5 sentences in each cell.
APA format is suggested for references, but are not required.
Financial Accounting
Student Name
Institution
Course Name
Instructor
Date
Financial Accounting
Part 1
Accounting is crucial in making business decisions since it provides financial information used by management, shareholders, and government agencies. Accounting is the practice of consolidating financial data to make it easy to comprehend for all stakeholders and investors (Berkau, 2020). Accounting's primary objective is recording and reporting the financial operations, financial results, and cash flows. Accounting standards increase the reliability of financial statements. Standardized reporting enables all parties involved in a firm, including shareholders, to assess its performance. Financial reporting should be transparent, dependable, and detailed.
Accounting is essential since it keeps an accurate record of the business's financial information. Stakeholders can use current records for assessing current financial figures with historical data. With thorough and logical records, it enables stakeholders to evaluate a business's success for a given period (Amir & Ghitti, 2020). Additionally, accounting is crucial for the internal users of the company. According to Amir & Ghitti (2020), the management team makes key business decisions based on its financial position illustrated by accounting records. Accounting also makes it easier to share corporate results with a large audience. In the outside world, creditors, lenders, and shareholders are the primary users of accounting data. Businesses need to acquire the confidence of these prospective clients by delivering precise and fast financial data.
Financial statements illustrate an organization's financial position at a given period. They provide important information about what a firm holds and owes, along with its revenue and expenditures (Warren & Jones, 2022). The three main types of financial statements are the balance sheet, profit and loss statement, and consolidated statement of cash flows. These three financial statements illustrates an entity's equity, debts, income, outgoings, and cash flows from operations (Warren & Jones, 2022). Financial statements may cover various timelines. Annual financial statements represent the most recent fiscal year of the business. Businesses can generate provisional financial statements.
Part 2
Accounting Perspectives
Economic Perspective (Significance for our economy and capital markets
Corporate Perspective
Investor Perspective
Financial accounting is:
Financial accounting is the systematic documentation of a business's fiscal activities to aid in preparing financial reports for the company. Economics is a function within the corporation that deals with production, the business's debt, and how much money the organization spends. The social science that demonstrates expenditure, the distribution of corporate funds, and output in modern capital markets i...