Financial Accounting

Introduction to Financial Accounting and Financial Statements Financial Accounting function (or accounting in general) act as a part of the information system for the business. Organisations invest large amounts of money in information system to collects relevant data which can be beneficial for them. This data is then converted into information b...

It is a legal responsibility of businesses to keep records for all business transactions. This article explains this term in simple words. Financial Accounting function mostly records data from within the organisation by recording business transactions. A transaction is an event which can be measured in monetary terms i.e. it has a financial value...

Financial statements contain wealth of information which can be useful to the variety of readers and users of these statements. These users are called “Stakeholder” as they have some sort of stake (interest or risk) associated with the business. These stakeholders are the individuals or organisations who have some sort of interest, financial and/or...

 Elements of Financial Statements - Part 1 Capital/Equity When a transaction occurs, it affects one or more aspects of financial statements which are called elements of financial statements. The analysis of the transactions is carried out to decide ​which one or more elements needs updating as a result of the transaction. There are five elements ...

Elements of Financial Statements When a transaction occurs, it affects one or more aspects of financial statements which are called elements of financial statements. The analysis of the transactions is carried out to decide which one or more elements needs updating as a result of the transaction. There are five elements of financial statements; ...

Elements of Financial Statements When a transaction occurs, it affects one or more aspects of financial statements which are called elements of financial statements. The analysis of the transactions is carried out to decide which one or more elements needs updating as a result of the transaction. There are five elements of financial statemen...

As per IASB (2020), “Income is increase in economic benefits (Cash) during the accounting period in the form of inflows or enhancements of assets (Cash) or decreases of liabilities that result in increases in equity (discount received, profit increases equity), other than those relating to contributions from equity participants (share issue).” (IAS...

What can be recorded as expense in business? As per IASB(2020),” Expenses are decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrences of liabilities that result in decreases in equity, other than those relating to distributions to equity participants.” (IASB, 2020) Not all C...

To carryout a financial analysis of a company, analysts need financial statements of the business. For many students, these are sourced from annual reports published by the business. This article explains these reports and guides students on how to source these. Annual Reports If you are required to write a dissertation or a coursework on f...

The purpose of this article is to explain the contents of Profit or Loss Statement which can then be used for ratio analysis to analyse the company’s financial performance. As ratio analysis use many figures from Profit or Loss statement, without understanding this statement properly it would not be possible to carry out an accurate and comprehensive financial analysis of the company. 

Statement of Financial Position is a primary financial statement which gives the financial position of business on the date when this statement is prepared. The previous name for this statement was “Balance Sheet” and most of the businesses still use this title for this statement. Just like Statement of Profit or Loss

While Statement of Cash Flows explains Cash and Cash Equivalent figure from Statement of Financial Position, this statement gives more details and explains the figures given in the equity section of Statement of Financial Position. Rows titles given in the equity section of Statement of Financial Position are the titles for each column..

Statement of cash flow is the third financial statement given in the annual reports. You would have noticed that all five elements of financial statements have already been covered by Statement of Profit or Loss (Income & Expense) and Statement of Financial Position (Assets, Liabilities and Capital). Therefore, a question arises on the purpose ...

This article will introduce you to the ratio analysis which is a simple but very important technique to analyse the financial statements. It's so simple to teach and understand that it is taught at the start of any accounting qualification. For example, it is taught at year one on an undergraduate accounting qualification. In fact, there is always ...