Watch financial accounting video lessons and learn about accounting terms, financial statements and more. Now recognized as the nation’s leading authority on financial foul play, Abagnale is a charming rogue whose hilarious, stranger-than-fiction international escapades, and ingenious escapes-including one from an airplane-make Catch Me If You Can an irresistible tale of deceit. On the other hand, Financial Accounting is more concerned with information that is needed by stockholders and regulatory agencies like the Bureau of Internal Revenue (BIR) and the Securities and Exchange Commission (SEC). The reports are prepared in accordance with Generally Accepted Accounting Principles (GAAP).
In comparison, Financial Accountants prepare the monthly, quarterly or annual financial reports for submission to the stockholders and the public. Management accounting information is needed by managers who are tasked to set the directions of the company. So it’s the purpose of accounting information, which gives users the basis to analyse their main interests.
It considers past historical data that are used for preparing financial statements; future economic events that may be used for planning purposes, and; manufacturing cost. The financial scandals involving Enron, Arthur Andersen and other auditing firms have raised deep apprehension within the Accountancy profession regarding ethical standards. Remember that in Accounting for each debit account there must be at least one credit account.
The incidents have hurt many companies with the culprits paying huge fines, jail terms, and financial collapse of a number of firms. In accounting, there must be at least one account debited and one account credited so that the accounting equation stays in balance. This is sometimes the most challenging part of the accounting cycle, knowing which account to debit and which account to credit. This brings us to the next section, the summary of the major financial statements used by companies. A balance sheet shows the financial position of a company as of one specific date.
Even though a trial balance is typically not referred to as a financial statement, for the purposes of this tutorial, let’s say that it is. This is because you are dealing with asset, liability, owner’s equity, and expense and revenue accounts and adding up the figures to make sure that both sides match. A financial statement is a report that is prepared by accountants to summarize the financial affairs of a business for managers, employees, etc. With accounting software such as Quickbooks or Sage, financial statements like the balance sheet can be prepared rather quickly. There is an enormous amount of legislation governing the way financial information is recorded and displayed to users.