The paper “ Tools and Techniques to Solve Financial Problems and Make Effective Business Decisions" is a worthy example of an assignment on finance & accounting. External users of financial accounting reports or statements such as creditors or investors have a direct financial interest in the economic status of the organization, while managerial accounting reports are primarily of interest to parties involved in the day-to-day management of the organization. In this assignment, you are to identify what type of reports the various users identified below are interested in receiving and why. The first column has been completed for you. Financial accounting is being used by the indicated professionals to report the financial performance and the company’ s results.
For instance, public companies use financial accounting because it is a requirement that they declare their results. The statements so created can facilitate easy analysis. Managerial accounting is used to compile data that is required by the managers to make relevant decisions. Financial condition, on the other hand, is necessary for business owners to know the viability of their business and whether it is achieving the set goals.
Performance is used by various users to know how the company is generally scaling while the controls are important as they ensure quality and provision of guidelines for successful operations. In the assignment be sure to have the managers describe in a paragraph each the purpose and uses of financial accounting and managerial accounting and why they are important to the users. Financial accounting consists of statements that are used by companies and other users to record analyze and report financial information. They include cash flows, statement of changes in net assets, the balance sheet and income statements.
Cash flow is used to indicate the inwards and outwards transactions within the business over a given period of time (Vance, 2003). This is important to the users like investors, creditors as they are interested in knowing what is happening to the liquid resource. Statements of Changes in net assets are important as they indicate the changes in the net assets over a given period of time. It shows and gives reasons why there is a change in the retained earnings over a period of time.
A balance sheet shows the financial position of the business. This is important s it help users know to know the viability of the company and whether it is in a position to pay shareholders upon liquidation. Finally, income statements are important as it indicates sales and the expenses the company incurs. It, therefore, shows whether the company is making profits or losses. Managerial accounting is concerned with preparing those financial statements for internal purposes and therefore there are no serious guiding principles. And therefore in most cases uses discuss with the individual to prepare it, to agree on the format, uniformity and the comparability of information to reduce vagueness in the statement. The unique features of accounting practices within the healthcare industry: ControllershipThis is one of the unique accounting practices within the health industry.
It entails planning for controls, reporting, evaluating, consulting, and protecting assets, and the appraisal of economic health. TreasurershipThis is another unique practice in the health industry and entails providing capital, maintaining investor relations, providing short term financing, banking, and custody, overseeing credits, choosing investments and finally providing insurance. Funding Accounting---This is an accounting system whereby both assets and liabilities are segregated in the accounting records.
Each fund that is used is considered independent with own set of accounts though the basic accounting principles like Assets = Liabilities must be upheld. Contractual Allowances: This is defined as the difference in the hospital bill and a payment from the third party such as government programs, insurance among others. This can also be referred to as a contractual adjustment. Depreciation: This is a financial term that refers to the decrease in value of an asset which is caused by unfavorable market situations.
This can also be due to the time value of the tangible asset. Funded Depreciation: This is a fixed management method that assists organizations and companies to allocate funds meant to renew tangible assets that are used in operations.