Question

I need a brief explanation of these ideas in accounting 2 (1 or 2 paragraphs) to show the main purpose of the class

Accounting for corporations

Long-term liabilities

Investment

Reporting the statement of cash flows

Analysis of financial statement

Answer 1

corporation is an entity recognised by law as possessing an exitence separate and district from its owners It is seprate legal entity . Corporation have a remarkable avbility to obtain huge amount of capital necessary . Corporation accounting having following advantage :

1) Easy transfer of Ownership

2) limited Liability

3) Easy capital generation

4) Professioanl management

Corpiration Accounting having coupld of disadvantage like Double taxation and Givernment regulation

Long term Liability - While reviwing Balane Sheet , one of the obligation resulting from a previous event .This liability is not due with in One year time period as on balance Sheet date . Long term liability also represents " Non current Liability "
Movement of long term liability will help to understand companies cash flow position . Coupl of long term liability includes - Bond payable , long term loan , pension liability, As per stabdard all long term liability we need to calculate current and Non current position whihc help us to determined working capital

Investment

Investment mainly represents purchase of goods that are not consumed today but which will create future economic benefit and creation of wealth . As per financal term , Invetsment mean purchase of Monetary asset with aim that the asset will provide income in near future

Investment assets are tangible or intangible item obtained for providing additional income or held for speculation . Invesment accounting process now disclose in the financial statement as per IFRS 9 . Invetsment company can make on Debt , Equity . Company uised to follow fair vakue metod of accounting in case of Investment

Reporting the statement of vash flow - cash flow is one of the major componenet for any company to disclose companies cash and cash equivalent baalnce . As per standard , company used to follow Indirect method to isclose Cash flow whihc mainly cover cash flow from operation, cash flow from investment and Financial activity . Cash flow from operation normally cover all movement of current asset as well as current liability and its start with companies Net profit adjusted with Depreciation, amortization with allabnormal expenses ( provision for doubtful ebt ) + abnormal gain

Cash flow from Investment activity mainly consist of major capex Cash flow from Financial activity include movement of loan issue , loan repaymen , long term liability , Dividend paymebt , stock repurchase .