Financial services refer to all the financial activities that an organization undertaking. It can be anything from buying shares to creating and running a business. Financial services are the financial dealings conducted by banks, securities firms, insurance companies, and financial institutions. Financial markets refer to the financial markets that include foreign exchange, stocks, and options. They also cover futures, options, commodities, and securities.
Accounting is used to record, classify, summarize, and interpret financial statements. Accounting reports are used by managers, investors, taxing authorities, and other professionals to understand the financial condition and performance of a business. Accounting records everything that enters into the business, with the exception of information required by law such as bank routing numbers and trade debtors’ names.
An accountant provides a detailed analysis of the financial condition of a company. Auditors then review those financial statements. An accountant is required to prepare and audit financial statements that show the income and other results of a company. All transactions in a company’s financial condition must be recorded. In addition, financial statements provide information about the assets, liabilities, revenues, expenses, and other relevant information that are necessary to understand the operations of the business.
In the United States, accountants are required to file an annual report to provide investors and other professionals with accurate and reliable information on a company’s financial condition. The report is generally prepared based on the year ending account records. The financial report provides financial statements and comprehensive documentation of all activities related to the business. The annual report is also required to include all government payments made to the company. The report is commonly referred to as the P&L (Profit and Loss) report.
One of the major parts of accounting is the preparation of balance sheets, which show the difference between assets and liabilities at a particular point in time. The balance sheets may also show the income statement that gives a detailed picture of income from operating activities and includes revenues and expenses. Operating income refers to income from daily operations, selling and administrative expenses, and mortgage interest and other payments. Income statement has many subparts and includes balance sheet, statement of cash flows, balance sheet presentation, income statement analysis, and commentaries.
A financial statement describes the business’s balance sheet. It shows the total assets, liabilities, owner’s equity and capital. It also shows the gross and net income as well as a statement of comprehensive profit and loss.
Financial statements are prepared for various purposes, such as obtaining financing, tax reporting, and marketing planning. It should be prepared by a certified public accountant who is independent of the business and has the skill, knowledge, and experience to produce accurate and reliable financial statements. In preparing financial statements, care should be taken to ensure that all items being reported are in the correct amounts. Also, in order to ensure consistency in financial reporting throughout the business, the accountant must make sure all of the reports have been prepared in accordance with Generally Accepted Accounting Principles (GAAP).
The most common type of financial statements used in the United States are the annual report and shareholder’s annual report. The annual report is prepared and filed by a United States company after it has been duly authorized by the shareholders for circulation. It is a summary of the most recent events regarding the business. The shareholder’s annual report provides financial information on the income and assets of the company that is prepared in the year that follows the year in which the report is filed. Both reports are required to be filed with the United States Securities and Exchange Commission (SEC) upon the occurrence of the following events: the company becomes a public company; the company becomes a joint operation; or the company issues more than one public document.