Mixto, Janine Kate P.

BSAIS 1-1 Block B

FINANCIAL ACCOUNTING AND REPORT

ASSIGNMENT #1

I. Search for the following: (Define)

1. FINANCIAL - The term "financial" refers to anything related to finance, which involves the management, study, and
analysis of money, investments, and other financial resources.
2. ACCOUNTING - It the process of recording, analyzing, and reporting financial transactions of a business or
organization. It involves the systematic recording of financial data, the preparation of financial statements, and the
interpretation of financial information for decision-making purposes.
3. REPORTS - Are structured documents that present information in a clear and organized manner. In the context of
business and finance, reports often refer to financial reports, which summarize and communicate the financial
performance and position of a company. Examples of financial reports include balance sheets, income statements,
cash flow statements, and annual reports.
4. BUSINESS TRANSACTIONS - Business transactions refer to the activities and exchanges of value that occur within a
business. These transactions can involve the buying and selling of goods or services, the payment or receipt of
money, the borrowing or lending of funds, and other financial activities that impact the financial position of the
business.
5. JOURNAL - In accounting, a journal is a record of financial transactions in chronological order. It serves as the first
step in the accounting cycle and provides a detailed account of each transaction, including the date, description, and
amounts involved. The journal entries recorded in the journal are then transferred to the general ledger for further
analysis and preparation of financial statements.
6. ASSET - An asset is anything of value that is owned or controlled by an individual or a business. It can be tangible,
such as cash, inventory, or property, or intangible, such as patents, trademarks, or goodwill. Assets are recorded on
a company's balance sheet and represent the economic resources that the company has at its disposal.
7. LIABILITY - A liability is an obligation or debt owed by an individual or a business to another party. It represents a
future sacrifice of economic benefits that the entity is required to make. Examples of liabilities include loans,
accounts payable, and accrued expenses. Liabilities are recorded on a company's balance sheet and represent the
amount owed to creditors.
8. EQUITY - Equity represents the ownership interest in a company. It is the residual interest in the assets of the entity
after deducting liabilities. Equity can be in the form of contributed capital from shareholders and retained earnings
from accumulated profits. It represents the net worth of the company and is also recorded on the balance sheet.
9. INCOME - Income refers to the money or revenue earned by a business or an individual during a specific period. It
can be generated from various sources, such as sales of goods or services, rent, interest, royalties, or dividends.
Income is an important component of the income statement and is used to measure the profitability of a business.
10. EXPENSES - Expenses are the costs incurred by a business or an individual in the process of generating revenue. They
represent the outflow of economic benefits, such as salaries, rent, utilities, advertising, and supplies. Expenses are
deducted from revenue to calculate the net income or loss on the income statement.

II. Answer the ff. Questions.

1. What is Financial Accounting and Reporting?

Financial Accounting and Reporting is a branch of accounting that focuses on recording, summarizing, and
presenting financial information about a business entity to external parties, such as investors, creditors, and
regulatory authorities. It involves the preparation of financial statements, which include the balance sheet, income
statement, statement of cash flows, and statement of changes in equity. The purpose of financial accounting and
 reporting is to provide accurate and reliable information about the financial performance and position of a
company, enabling stakeholders to make informed decisions.

2. What is an example of Financial Accounting and Reporting?

An example of Financial Accounting and Reporting is the preparation of annual financial statements for a
corporation. These statements typically include the balance sheet, income statement, statement of cash flows, and
statement of changes in equity. The balance sheet provides information about the company's assets, liabilities, and
equity at a specific point in time. The income statement shows the company's revenues, expenses, and net income
or loss over a specific period. The statement of cash flows reports the cash inflows and outflows during the period,
while the statement of changes in equity shows the changes in the company's equity accounts. These financial
statements are prepared in accordance with generally accepted accounting principles (GAAP) and are used by
investors, creditors, and other stakeholders to evaluate the financial health and performance of the company.

3. Financial Accounting and Reporting

Financial accounting and reporting involve the preparation and presentation of financial information to various
stakeholders, such as investors, creditors, and regulators. It aims to provide an accurate and transparent view of a
company's financial performance and position. Here are some key points related to financial accounting and
reporting based on the search results:

Financial Statements: Financial statements are one of the primary outputs of financial accounting and reporting. They
provide a summary of a company's financial activities and include the following:

1. Balance Sheet

Also known as the statement of financial position, the balance sheet presents a snapshot of a company's assets,
liabilities, and shareholders' equity at a specific point in time.

2. Income Statement

The income statement, also called the statement of profit and loss or statement of operations, shows a company's
revenues, expenses, and net income or loss over a specific period.

3. Cash Flow Statement

The cash flow statement provides information on a company's cash inflows and outflows from operating, investing,
and financing activities during a given period.