Essay
MNE3701 ASSIGNMENT 2 2023
- Course
- Institution
MNE3701 ASSIGNMENT 2 2023
[Show more]
1 review
By: yvonnemalapanematjila • 1 year ago
By: BMZAcademy • 6 months ago
thank you for the review yvone please feel free to contact if you need anything with the module or other modules, you can contact us here or directly using the details provided in the document
Seller
Follow
BMZAcademy
Reviews received
Content preview
BMZ AcademyTable of Contents
QUESTION 1 ............................................................................................................. 2
By using practical examples, demonstrate how you would go about
constructing financial statements of your small business. (30) .......................... 2
Financial statements ............................................................................................ 2
Importance of financial statements..................................................................... 2
financial statements preparation......................................................................... 2
1. Recorded facts .............................................................................................. 2
2. Accounting conventions .............................................................................. 3
3. Personal judgments ...................................................................................... 3
3 types of financial statements............................................................................ 3
Balance sheet .................................................................................................... 3
Income statement.............................................................................................. 5
Cash flow statement ......................................................................................... 6
QUESTION 2 ............................................................................................................. 7
By using practical examples, demonstrate how you would go about conducting
financial forecasting for your business. (20) ......................................................... 7
4 common types of financial forecasting ........................................................... 7
1. Sales forecasting .......................................................................................... 7
2. Cash flow forecasting ................................................................................... 8
3. Budget forecasting ....................................................................................... 9
4. Income forecasting ....................................................................................... 9
BMZ ACADEMY 061 262 1185/068 053 8213/0717 513 144
, BMZ Academy
QUESTION 1
By using practical examples, demonstrate how you would go about
constructing financial statements of your small business. (30)
Financial statements
Financial statements are reports that explain a company’s financial performance and
profitability for a certain period of time. There are three basic financial statements:
balance sheets, income statements (or profit and loss statements), and cash flow
statements. Business owners use other financial reports, such as the statement of
retained earnings, less frequently.
Importance of financial statements
Financial statements are important because they let stakeholders—such as
shareholders, creditors, and regulators—understand a company’s overall financial
performance and health. Public companies are required to publish their financial
statements in an annual report. Typically, financial statements provide information
about a business’s:
• Economic resources and obligations
• Earning capacity
• Potential cash flows
• Management status
• Accounting policies
Most importantly, financial statements help business owners better understand their
bottom lines and make smarter business decisions.
financial statements preparation
Because financial statements serve as fundamental sources of financial information,
one needs to apply basic accounting principles to ensure accuracy and consistency.
One can prepare financial statements using three principles.
1. Recorded facts
An original or historical cost of accounts can help prepare financial statements.
Typically, record prices and assets purchased at different times at the original cost.
BMZ ACADEMY 061 262 1185/068 053 8213/0717 513 144
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller BMZAcademy. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $4.72. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
78462 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now