Accounting. Importance of Accounting Reports (Most Important)

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Accounting. Importance of Accounting Reports (Most Important)

Lecture notes, cheat sheets

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15. Significance of financial statements

Financial statements - this is a system of indicators reflecting the property and financial position of the organization at the reporting date, as well as the financial results of economic activity for the reporting period. Financial statements are a source of information for making management decisions for external and internal users.

Preparation of financial statements - this is the process of collecting, summarizing and systematizing current accounting data in order to create final information about the state of assets, capital, liabilities, financial results of the enterprise.

Legal entities engaged in entrepreneurial activities, regardless of the form of ownership, are required to submit annual and quarterly financial statements.

Financial statements are tables filled in according to synthetic and analytical accounting data based on account balances and sub-accounts allocated in the General Ledger as of the reporting date. In accounting, reporting is the final stage.

The content, frequency, and timing of reporting are established by the relevant regulations based on the needs of taxation, management and operational management of the economy. Standard forms of reporting, as well as instructions for their application, are approved by the Ministry of Finance of Russia, specialized departmental forms for agriculture - by the Ministry of Agriculture of Russia. Organizations have the right to use forms approved by the legislation of the Russian Federation or independently developed forms as forms of financial statements, subject to the general requirements for financial statements.

Financial statements allow you to determine the total value of the property of the enterprise, fixed and working capital, the amount of own and borrowed funds. According to the financial statements, an excess or shortage of sources of funds for the formation of reserves and costs is established, the security of the enterprise with its own, credit and other borrowed sources is determined.

With the help of financial statements, the creditworthiness of an enterprise is assessed - its ability to fully and timely pay off its obligations.

Accounting reports determine which assets are the most liquid: fast-selling, slow-selling and difficult-to-sell. According to the financial statements, the most urgent obligations of the enterprise, short-term loans and borrowings, as well as long-term loans are established, which is important for an enterprise operating in a market environment surrounded by competing enterprises.

Reporting is used for the current management of the organization's activities, its data is necessary for the analysis of production and financial activities. With its help, the causes of deviations from the specified parameters are revealed, unused production reserves are revealed.

Reporting should be simple, clear and understandable to users so they can participate in overseeing the operation of the organization. It does not have to be cumbersome and complex, so significant work has been done in recent years to reduce and simplify reporting.

Author: Kabkova E.N.

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