BUSN 70 Lecture Notes - Lecture 33: Accounting Equation, Income Statement, Earnings Before Interest And Taxes
13 Mar 2021
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Document Summary
To aid in internal planning and control. For external purposes such as reporting to the internal revenue service, stockholders, creditors, customers, employees, and other interested parties. Managerial accounting = the internal use of accounting statements by managers in planning and directing the organization"s activities. Cash flow = movement of money through an organization over a daily, weekly, monthly or yearly basis. Help prepare budget = an internal financial plan that forecasts expenses and income over a set period of time. Most companies prepare a master budget and budgets for smaller segments of the organization. The principal value of budgets lies in the breakdown of cash inflows and outflows. Managers use accounting statements to report to outsiders. Used for filing income taxes, obtaining credit and reporting results to stockholders. Annual report = summary of a firm"s financial information, products, and growth plans for owners and potential investors.
