Determine the integrity of a companys financial reporting

Reference no: EM133474191

Case: Accrual accounting is an accounting method where revenue or expenses are recorded when a transaction occurs vs. when payment is received or made. The cash-basis approach is easy to use in terms of cash-flow, but it often fails to provide a complete picture of a business's finances at times.

in Jay's case I would recommend accrual basis accounting because it lets you see a full picture of your business's finances. This is because you track receivables and payables rather than just money that has been deposited in or deducted from your accounts.

Revenue recognition principle is important because it directly determines the integrity of a company's financial reporting. it allows external entities, such as analysts and investors, to quickly compare the income statements of different companies in the same industry.

Reference no: EM133474191

Questions Cloud

What is the profit for this investment : Calculate earnings before interest and tax (EBIT) and Calculate tax paid by Exotica Ltd - What is the profit for this investment

Different communication styles : In leadership, it is essential to know different communication styles. Describe at least two communication styles utilized by leaders.

What accreditation and certificates do you need for job : What accreditation and/or certificates do you need for your job? How do you ensure that your accreditation / certification / knowledge are current?

Which theory best fits the interaction of the leader : Think of a leadership situation with which you are familiar. Which theory best fits the interaction of the leader, followers, and situation in your example?

Determine the integrity of a companys financial reporting : Determine the integrity of a companys financial reporting. it allows external entities, such as analysts and investors, to quickly compare income statement

Capable of learning more and taking on more responsibility : If you empower employees to be critical thinkers and make decisions, they will show they are capable of learning more and taking on more responsibility.

How do income expenses liabilities and profit relate to you : The healthcare administrator should be able to understand. How do income, expenses, liabilities, and profit relate to you as the administrator in a hospital?

Analyze the trends in the income statement : Identify any significant revenue, expense, or profitability changes and explain their potential impact on the business. Discuss any challenges

What change were they looking to achieve and why : What change were/are they looking to achieve and why? What was/is the primary message of their advocacy?

User Account

All Pages