Financial Accounting Practices in an Organization

Giving a presentation to a group of people with no knowledge of the subject matter leaves the presenter with the task of coming to the presentation prepared and fortified with the proper information on the subject.   This paper will outline a scenario of a presentation given to a small group of business owners with no prior knowledge of accounting or finance.   The presentation will attempt to identify the target audiences, purposes and natures of financial statements and managerial reports.   The presentation will also outline the use of financial accounting information when making informed and ethical business decisions in an organization.

Identify Variables of a Financial Statement
Financial Statements are formal records of an organizations financial activities.   It is a part of the process of financial reporting.   The financial statement provides an overview of a businesses financial position in short and long-term analysis.   There are four basic types of financial statements:
 Balance Sheet: It is a statement of financial condition and reports on a company’s assets, liabilities and net equity at a given point in time.
 Income Statement: A profit and loss statement that reports on a company’s results of operations over a period of time.  
 Statement of retained earnings: Outlines the changes in a company’s retained earnings over the reporting period.
 Statement of cash flows: Reports on a company’s cash flow activities, particularly the operating, investing and financing activities.
The purpose of the financial statement is to provide information pertaining to an organizations financial performance, strength and its changes in financial position that is make useful to many users when making economic decisions.   The statement needs to be relevant, understandable to all, contain reliable information and comparable.   The organizations liabilities, equity, reported assets, income and expenses are reported in a financial statement.