![]() ![]() Because of that, financial accountants have to ensure that income statements, cash flow statements and balance sheets comply with the Generally Accepted Accounting Principles (GAAP) standards.Īnd if the company in question is public, its financial statements must also comply with the Securities and Exchange Commission (SEC) regulations.Īs with tax accounting, financial accounting mistakes can cost you a lot of money and get you in legal trouble. Businesses show them to their lenders, creditors and investors. These financial statements are meant for external use. Balance sheet: Summarizes what the company owns and what it owes at the end of the accounting period.Cash flow statement: Summarizes the company’s cash inflows and outflows over the accounting period.Income statement: Summarizes the company’s revenue and expenses over the accounting period.There are three main types of financial statements: Posting closing journal entries to close the books.Posting adjusting journal entries to the general ledger.Calculating the unadjusted trial balance.Posting journal entries to the general ledger.They typically follow the standard eight-step accounting cycle: Financial accountants help businesses track, record and categorize financial transactions. ![]()
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