Question

What are four common types of reports used in the financial services industry? Describe each of them.

Answer 1

THE FINANCIAL SERVICE INDUSTRY PLAYS A VITAL INTERMEDIARY ROLE IN THE WORLD ECONOMY AS IT MOVES MONEY FROM ENTITIES WITH EXCESS FUNDS TO THOSE WITH A NEED FOR FUNDS. IT INCLUDES FIRMS THAT ARE ENGAGGED IN THE ACTIVITIES SUCH AS INVESTING,LENDING,INSURANCE,SECURITIES TRADING ETC .IT'S CLIENTS ARE INDIVIDUAL,BUSINESS,NPO AND GOVT. AGENCIES.

COMMON TYPES OF REPORTS USED IN THE FINANCIAL SERVICE INDUSTRY ARE-

1-INCOME STATEMENT-AN INCOME STATEMENT IS A TYPE OF SUMMARY FLOW REPORT THAT LISTS AND CATEGORIZE VARIOUS REVENUE AND EXPENSES THAT RESULTS FROM BUSINESS OPERATIONS DURING A GIVEN PERIOD-A YEAR,AQUARTER OR A MONTH. THE DIFFERENCE BETWEEN REVENUEAND EXPENSES REPRESENT A COMPANY'S NET INCOME OR NET LOSS.

2-STATEMENT OF CAOITAL-IT SHOWS CHANGE IN OWNER'S CAPITAL ACCOUNTS OVER TIME. IF YOU ARE A BUSINESS OWNER.YOUR CAPITAL ACCOUNT REPRESENTS HOW MUCH OF YOUR CAPITAL ACCOUNT REPRESENTS HOW HOW MUCH OF YOUR COMPANY YOU OWN.AT THE CLOSE OF THE ACCOUNTING CYCLE ,ANY NET INCOME BECOMES YOURS.WHETHER YOU REINVEST IT IN THE BUSINESS,USE SOME OF THE PROFIT AS PERSONAL INCOME OR WITHDRAW ALL OF IT THE OWNER STATEMENT OF CAOITAL WILL REFLECT ANY CHANGE TO THE CAPITAL ACCOUNT.

3-BALANCESHEET-IT IS BASED ON THE EQUATION_ASSET=LIABILITIES+OWNERS' EQUITY. IT LISTS EVERYTHING YOUR COMPANY OWNS,EVERYTHING YOUR COMPANY OWS TO CREDITORS AND THE VALUE OF YOUR OWNERSHIP STAKE IN YOUR COMPANY.

4-CASH FLOW STATEMENT-IT SHOWS ALL SOURCES AND USES OF A COMPANYS' MONEY DURING THE ACCOUNTING PERIOD. SOURCES OF CASH LISTED ON THE STATEMENT INCLUDE REVENUES,LONG-TERM FINANCING,SALES OF NON-CURRENT ASSETS,AN INCREASE IN ANY CURRENT LIABILITY ACCOUNT OR A DECREASE IN ANY CURRENT ASSET ACCOUNT.