Lernmaterialien für Bus 211 ch1 an der Istanbul Bilgi University

Net Cash Flow=Cash Inflows – Cash Outflows

Owners investment in the company

• withdrawals+net income/(loss)-dividends
• investment: put assets into business
• Withdrawal: take assets out of the business
• Net income : the excess of revenues over expenses
• Net loss: the excess of expenses over revenues

1. Also known as the statement of financial position
2. Usually prepared as of the last day of the accounting period to show the organizations financial position (or status) as of that specific date
3. Reflects the accounting equation in its structure

• Financial accounting
• accounting information for external decision-makers : Bank, creditor, government.. _ reports are called financial statement 
  • Bálance sheet 
  • Income statement 
  • Cash flow statement
• 
  
• Managment accoutning
  • accounting information for internal decision makers about business activities and how has it performed in the past
  • this information is used to plan for the future

• Ethics in the preparation of financial reports is important because users of these reports must depend on the good faith of the people involved in their preparation. 

               • The intentional preparation of misleading financial statements is called fraudulent financial reporting. 

               • Fraudulent financial reporting can result from the distortion of records, falsified transactions, or the misapplication of various accounting principles. 

               • The motivation for fraudulent financial reporting could be to inflate the perceived value of a business, meet stockholders’ and financial analysts’ expectations, obtain financing,                            or receive personal gain.