Principles of Financial Accounting Presentation

Recording, Summarizing & Interpreting financial information to facilitate decision-making.

1. PRINCIPLES OF
FINANCIAL ACCOUNTING

2. WHAT IS

| Statement

Operating Actos

Financial Accounting er

The process of

+ Recording

+ Summarizing

+» Interpreting financial information to
facilitate decision-making.

It provides a systematic way to track and report
an organization's economic activities.

3. PRINCIPLES OF
FINANCIAL ACCOUNTING

+ Matching principle,
+ Revenue recognition principle,
+ Consistency principle, and others.

Adhering to these principles ensures consistency —
and accuracy in financial reporting.

4. FINANCIAL

Statements

INCOME Displays revenue and expenses,
STATEMENT resulting in net income or loss.

Æ Presents assets, liabilities, and BALANCE
equity, providing a snapshot of SHEET

j | the financial position.

5. ACCOUNTING CYCLE

1. Identifying Transaction

Recognition of financial events that
impact the organization's accounts.

2. Recording

Systematic entry of identified
transactions into the accounting
system.

3. Posting to Ledger
Transfer of recorded
transactions to the general
ledger for each account.

7. Closing the Books

Resetting temporary accounts for the next accounting
period.

4. Preparing a trial balance

Compilation of all ledger balances to
ensure debits equal credits.

5. Adjusting Entries
Corrections and adjustments
made to ensure accurate
financial reporting.

6. Creating Financial
Statement

Generation of key financial
statements based on adjusted
balances.

6. NS Ys

GAAP
(Generally Accepted Accounting Principles)

Overview

GAAP, or Generally Accepted Accounting
Principles, is a set of standardized
guidelines and procedures used in the
United States for financial reporting.

These principles ensure consistency,
comparability, and transparency in financial
statements across different organizations.

7. NS

GAAP
(Generally Accepted Accounting Principles)

Importance

Compliance with GAAP is crucial for businesses as it
provides a reliable framework for financial reporting.
Adhering to GAAP standards enhances the credibility of
financial statements, instills confidence in stakeholders,
and facilitates accurate performance comparison across
different entities.

By following GAAP, organizations can meet regulatory
requirements and promote fair and transparent
financial reporting practices.

8. Importance of Accurate
Financial Reporting

Trust Correct Success
Decision

Accurate financial reporting builds trust with stakeholders, helps in making informed
decisions, and contributes to the long-term success of an organization.

9. Role of Financial Accounting
in Decision Making

Financial accounting information
aids decision-making by providing
insights into an organization's
financial health, performance, and
potential risks.

10. Key Ratios and
Analysis

Key financial ratios, such as liquidity ratios, profitability ratios, and solvency
ratios, offer valuable insights into a company's financial health and
performance

Liquidity Profitability Solvency

Ratio Ratio

11. o International Financial "0

Reporting Standards (IFRS)

IFRS is a set of global
accounting standards
that enhances

Y comparability and
consistency in financial
reporting across borders.

12. Ethical Considerations

Emphasize the importance of ethical behavior in financial accounting to
maintain trust and integrity in reporting financial information

13. | CONCLUSION

In this overview of financial accounting, covering fundamental
principles, financial statements, the accounting cycle, GAAP, and
the importance of accurate reporting. | explored how financial
accounting supports decision-making, delved into key ratios and
analysis, and discussed international standards and ethical
considerations. Financial accounting serves as a crucial tool for
understanding an organization's financial health, making
ons, and maintaining integrity in reporting. As we
's evident that a strong foundation in
accounting is essential for sustainable business practices and
successful financial management.

A