Deviations between the two serve as a " trip wire ' or feedback loop " to launch more detailed financial analyses in an effort to pinpoint trouble spots & opportunities annual report- summary of a firm's financial info , products , & growth plans for owners & potential investors . Financial statements meeting these conditions are audited . Primary external users of audited info are gov . agencies , stock holders , & potential investors , lenders , suppliers , & employers . Financial statements evaluate the return on stockholders' investments & the overall quality of the firmis myit team . The Accounting Process The Accounting Equation assets - a firm's economic resources , or items of value that it owns , ( cash , inventory , land , equipment, buildings , & other tangible or intangible things ) liabilities - debts that a firm owes to others ( bank loans , supplier credit , & other debts ) owners' equity - equal assets minus liability & reflects historical values . accounting equation - Assets = liabilities + owners'equity double - entry bookkeeping - a system of recording & classifying business transactions that maintains the balance of the accounting equation . accounting cycle - four - step procedure of an accounting system examining source documents , recording trans actions in an accounting journal , posting recorded transactions , & preparing financial statements . 1. Examine Source Documents: checks, credit card receipts, sales slips, & other related evidence concerning specific transactions. 2. Record Transactions: journal - a time- ordered list of account transactions 3. Post Transactions: ledger- a book or computer file with separate sections for each account. Transfer info from journal to ledger. The process is known as posting . At the end of the accounting period ( yearly , or monthly & quarterly), prepare a trial balance - a summary of the balances of all accounts in the general ledger . If , upon totaling , the trial balance doesn't balance ( the accounting equation is not in balance ) they look for mistakes ( an error in one or more of the ledger entries ) & correct them . 4. Prepare Financial Statements. In public corporations & other orgs, a CPA must attest, or certify that the org. followed generally accepted accounting principles in preparing the financial statements . When these statements are completed , the orgs books are " closed " & the cycle begins for next period .
Expert's Answer
Chat with our Experts
Want to contact us directly? No Problem. We are always here for you

Your future, our responsibilty submit your task on time.
Order NowGet Online
Assignment Help Services