Teacher : TERESA BERBESI

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FINANCIAL ACCOUNTANCY (or FINANCIAL ACCOUNTING)

is the field of accountancy concerned with the preparation of financial

statements for decision makers, such as stockholders, suppliers, banks,
employees, government agencies, owners, and other stakeholders.
Financial capital maintenance can be measured in either nominal
monetary
units or units of constant purchasing power. The fundamental need for
financial accounting is to reduce principal–agent problem by measuring
and monitoring agents' performance and reporting the results to
interested users.
Financial accountancy is used to prepare accounting information for
people outside the organization or not involved in the day-to-day running
of the company. Management accounting provides accounting information
to help managers make decisions to manage the business.
In short, financial accounting is the process of summarizing financial data
taken from an organization's accounting records and publishing in the form
of annual (or more frequent) reports for the benefit of people outside the
organization. current asset.

Financial Accounting vs Cost Accounting

1. Financial accounting aims at finding out results of accounting year in the form of Profit and Loss Account and Balance Sheet. Cost Accounting aims at
computing cost of production/service in a scientific manner and facilitate cost control and cost reduction.
2. Financial accounting reports the results and position of business to government, creditors, investors, and external parties.
3. Cost Accounting is an internal reporting system for an organization’s own management for decision making.
4. In financial accounting, cost classification based on type of transactions, e.g. salaries, repairs, insurance, stores etc. In cost accounting, classification is basically
on the basis of functions, activities, products, process and on internal planning and control and information needs of the organization.
5. Financial accounting aims at presenting ‘true and fair’ view of transactions, profit and loss for a period and Statement of financial position (Balance Sheet)
on a given date. It aims at computing ‘true and fair’ view of the cost of production/services offered by the firm
 Account a record of financial transactions; usually refers to a Accountant -- a person who trained to prepare and maintain
specific category or type, such as travel expense account or purchase financial records.
account.

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Managing Cash Flow All About Financial Management in Business

As a new business, your biggest challenge is likely to be
managing your cash flow -- probably the most important
financial statement for a new business is the cash flow
statement. The overall purpose of managing your cash
flow is to make sure that you have enough cash to pay
current bills. Businesses can manage cash flow by
examining a cash flow statement and cash flow
projection. Basically, the cash flow statement includes
total cash received minus total cash spent. Cash
management looks primarily at actual cash
transactions.
New business leaders and managers have to develop at least basic skills in financial
management. Expecting others in the organization to manage finances is clearly asking for
trouble. Basic skills in financial management start in the critical areas of cash management
and bookkeeping, which should be done according to certain financial controls to ensure
integrity in the bookkeeping process. New leaders and managers should soon go on to learn
how to generate financial statements (from bookkeeping journals) and analyze those
statements to really understand the financial condition of the business. Financial analysis
shows the "reality" of the situation of a business - seen as such, financial management is one
of the most important practices in management. This topic will help you understand basic
practices in financial management, and build the basic systems and practices needed in a
healthy business

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Financial planning is the task of determining how a business will afford to achieve its strategic goals and objectives. Usually, a company creates a Financial
Plan immediately after the vision and objectives have been set. The Financial Plan describes each of the activities, resources, equipment and materials that are
needed to achieve these objectives, as well as the timeframes involved.
The Financial Planning activity involves the following tasks;- *Quantify the amount of resource (labor, equipment, materials)
*Assess the business environment *Calculate the total cost of each type of resource
*Confirm the business vision and objectives *Summarize the costs to create a budget
*Identify the types of resources needed to achieve these objectives *Identify any risks and issues with the budget set
Performing Financial Planning is critical to the success of any organization. It provides the Business Plan with rigor, by confirming that the objectives set are
achievable from a financial point of view. It also helps the CEO to set financial targets for the organization, and reward staff for meeting objectives within the
budget set.
The role of financial planning includes three categories: 1. Strategic role of financial management
2. Objectives of financial management
3. The planning cycle

When drafting a financial plan, the company should establish the planning horizon,[1] which is the time period of the plan, whether it be on a short-term
(usually 12 months) or long-term (2–5 years) basis. Also, the individual projects and investment proposals of each operational unit within the company should
be totaled and treated as one large project. This process is called aggregation
 Setting up a Bank Account Making a Deposit
1. 2.
A. Cashier B. Customer A: How are you doing?
A: How are you doing today? B: Great. Thanks for asking.
B: Great. Thanks. A: What can I do for you today?
A: What can I help you with? B: I would like to deposit some money.
B: I would like to open a bank account. A: Are you depositing cash or a check?
A: What kind would you like to open? B: I want to deposit cash.
B: I need a checking account. A: How much are you depositing?
A: Would you also like to open a savings account? B: I would like to deposit $300.
B: That's fine. A: What account do you want your money in?
A: In order to open these accounts, you need to deposit a minimum
B: I want to deposit it into my checking account.
of $50.
B: I want to deposit $300. A: Do you need anything else?
A: I'll set up your accounts for you right now. B: No. That's all. Thank you.
B: Make sure to put $150 in each account.

3. Open a bank account 4.

A: How are you? A: How are things with you?
B: I'm well. Thank you for asking. B: I'm fine. Thank you.
A: What can I do for you? A: May I help you with something?
B: I need to open a bank account. B: I want to open a bank account.
A: What kind of account? A: Do you know what kind of account you want to open?
B: I just need a checking account. B: I want to open a checking account.
A: You can open a savings account, too. A: You should also open a savings account.
B: All right. Open both. B: That would be great.
A: You need to deposit at least $50 into both accounts. A: To open these accounts, you will need to make a deposit of at
B: I will be depositing $300 today. least $50.
A: I will set your accounts up right now. B: I would actually like to deposit $300 today.
B: Would you please put $150 in both accounts? A: Let me do that for you now.
B: Please put $150 in each account for me.
 Making a Withdrawal
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A= Cashier B= Customer
A: How are you doing today?
B: Great. Thank you.
A: What can I do for you?
B: I need to withdraw some money.
A: How much would you like to withdraw?( take out)?
B: I need to withdraw $300.
A: Which account would you like to take the money from?
B: I want to take it from my checking account.
A: All right, here is your $300.
B: Thank you very much.
A: Is there anything else that I can do for you?
B: No. That'll be all.
Transferring Money
7.
A: How are you doing?
B: Great. Thanks.
A: May I help you with something?
B: I would like to transfer some money.
A: Where would you like to transfer money from?
B: Take it from my savings account.
A: Where would you like the money transferred?
B: I want it transferred into my checking account.
A: How much would you like to transfer?
B: I would like to transfer $200.
A: Will that be all today?
B: That's it for today. Thank you.
A Check Bounces
A: What can I help you with today?
B: I have a problem.
A: What is the problem?
B: I wrote a check for $100 and it bounced.
A: Do you have enough money in your account?
B: I think so.
A: Let me check that for you right now.
B: Okay. Thank you.
A: Apparently there is only $57 left in your account.
B: You can't be serious!
A: That's what my records show.
B: I see. Thanks for your help.
8. Canceling an Account
A: Can I help you with something?
B: I need to cancel one of my accounts.
A: Is there a problem with it?
B: I don't need it anymore.
A: What would you like to do with all the money in this
account?
B: Just transfer it over to my remaining account.
A: I can do that.
B: That would be great.
A: Do you want to take any money out?
B: Not today.
A: It's going to take a moment for me to cancel your account.
B: That's fine. Take your time.
9. Using the ATM 10. The Card Gets Declined

A: I need to use the ATM. A: The total for all these items comes to $36.78.
B: What's stopping you? B: Take my VISA.
A: I'm not sure how. A: There is something wrong with your card.
B: I don't understand. B: What's going on?
A: I've never used one before. A: Your card was declined.
B: I can help you figure it out. B: That can't be right!
A: What do I have to do? A: Would you like me to try another card?
B: Slide your card into the machine. B: I don't have another one.
A: Then what? A: What about cash?
B: You need to type your PIN in. B: I didn't bring cash with me today.
A: What do I have to do next? A: I'm sorry, but you can't take the items until you can buy them.
B: Click on whichever option you want, and you're done. B: I'll come back for them tomorrow.