APT Initiatives
APT Business & Economics Resources
Minimising Workloads, Maximising Performance
Established in 1999

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Financial Accounting / Accounts

Concerns the production and reporting of historical financial information for use by external interested parties such as shareholders, banks and suppliers. Financial accounts are documents that are produced at the end of a business’s financial period, that summarise what has happened from a financial viewpoint throughout the period. They include: Income statement (Profit & Loss Account) – the statement of a firm’s income and expenditure and the level of profit made over a trading period (usually a year); Balance Sheet – the snapshot of a firm’s assets, liabilities and sources of finance at a particular point in time; Cash Flow Statement – the report detailing where sources of cash are and how cash has been used within the business. (NB only required for PLC’s). The legal requirements relating to the production and publication of financial information differs between different types of business organisations – for example – according to whether the business is a sole trader, partnership, private limited company (Ltd), public limited company (PLC), or a charity. It also varies according to size of business. For instance, small and medium sized private limited companies (SME’s) can submit abbreviated rather than the full versions of the company accounts to the registrar at Companies House. SYL, as a limited company, will have to submit an income statement (or profit and loss account), a balance sheet, a director’s report and any notes to the accounts, and, presumably, a special auditor’s report to the registrar. Even though a full set of accounts may not be legally required, many businesses regularly produce a full and detailed set of these, as they are essential documents to: help measure the performance of the business; identify strengths and weaknesses; help make decisions that improve the performance of the business; maximise the business’s potential; maximise the return on investment.

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