Financial Transactions and Reporting

Financial Transactions and Reporting

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A financial transaction is an event that involves at most two parties and has a direct impact on their financial situation. At the very least, one party can alter the amount of funds in its accounts (assets or liabilities). The timing of a financial transaction can differ depending on whether the entity is using accrual or cash accounting guidelines. The use of these techniques affects tax the tax reporting and taxability.

Stakeholders depend on financial statements to evaluate the condition of a company and their investments, such as shares and loans. Transparent and accurate financial reporting and transactions are a must for all entities.

Each financial statement’s goal is to give information that will allow stakeholders to comprehend the current state of affairs and the long-term goals of the business. Financial statements include income statement, cash flow statement and balance sheet. The first two are static images of a company’s finances while the last one is a forecast of future performance based on current trends and plans.

It is difficult to provide accurate and transparent financial reporting and transactions. Accounting journals are the most fundamental way to record a financial transaction. Each entry is manually recorded by accountants. This can be time-consuming and prone to error.

A unified financial statement, also known by the name consolidated financial statement, is a different option. This report shows all financial transactions for every institution within a university. By substantiating every transaction at the time of entry and analyzing the major transactions on a quarterly basis, the university can produce the consolidated financial statements which are free of any material misstatements.

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