Financial Transactions and Reporting

最后更新于：2024-05-22 05:11:41

A financial transaction is an event that involves at least two parties and has an immediate impact on their financial position. It causes at least one of the parties to alter the amount of money in its accounts (assets and liabilities). The timing of a financial transaction could differ depending on whether the entity is using the accrual or cash accounting method. These methods have an impact on tax reporting and taxability.

Financial statements are used by stakeholders to assess the performance of an organization and its investments, such as loans and stocks. Transparent and accurate financial transactions and reports are a must for all entities.

Any financial statement’s purpose is to give information that will allow stakeholders to be aware of the present situation and the long-term goals of the business. Financial statements include income, cash flow and balance sheet. The first two are static snapshots that show a company’s financial position, while the third is a forecast based on the current trends.

Transparency and accuracy in financial transactions and reports is a difficult process. Accounting journals are the most fundamental way to record a financial transaction. Each entry is manually recorded by accountants. This can be time-consuming and is vulnerable to error.

An alternative is to use a single financial statement, which is also referred to as a consolidated financial statement. The report reveals the combined results of every financial transaction at each institution within a university. By substantiating every transaction at the time of the entry and examining the material transactions on a quarterly basis the university can produce the consolidated financial statements which are free of any material misstatements.

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