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-   -   Need helps... Financial statement (https://www.askmehelpdesk.com/showthread.php?t=20675)

  • Feb 14, 2006, 03:39 PM
    man_on_fire
    Need helps... financial statement
    This is the trial balance
    Debit (₤) Credit (₤)
    Bank 5,163
    Buildings 55,000
    Van 4,000
    Shop fittings 5,200
    Equipment 1,000
    Capital 71,000

    Cash 195
    Purchases 5,500
    Sales 5,150
    Stationery 15
    Cleaning 40
    Lighting & heating 35
    Motor expenses 52
    Creditor 200
    Debtor 150
    SUM 76,350 ------ 76,350
    •Closing stock was valued at ₤ 1,380 as at 31st December 2001

    Question:
    The client phone you up and ask you why he has to pay you to produce financial statements when he knows himself how much profit the company is making.
    Required:
    Explain to the client which others group may be interested in an organizations financial statements and why. Use relevant figures from your solutions to question one (prepare profit and loss acc, balance sheet - I've done already)

    Anybody know about this type of this question, please help me to answer this question. Thanks you very much.
  • Feb 14, 2006, 04:22 PM
    CaptainForest
    Tell him he's right. He doesn't need you. Although then, you kind of won't get that A on the assignment.

    Financial Statements are more than just finding out how much money a company has made or loss.

    External Users (other than him) who might need it are
    - lenders (like a bank, and they can be a real hard @$$ when it comes to giving out loans)
    - people who might want to invest in the company
    - other owner's/shareholders
    - to satisfy laws (if it's a public company trading on a stock exchange)
  • Feb 14, 2006, 04:34 PM
    man_on_fire
    Quote:

    Originally Posted by CaptainForest
    Tell him he’s right. He doesn’t need you. Although then, you kind of won’t get that A on the assignment.

    Financial Statements are more than just finding out how much money a company has made or loss.

    External Users (other than him) who might need it are
    - lenders (like a bank, and they can be a real hard @$$ when it comes to giving out loans)
    - people who might want to invest in the company
    - other owner’s/shareholders
    - to satisfy laws (if it’s a public company trading on a stock exchange)

    Thanks man, and do I need to build a worksheet approach to represent the relevant figures to answer this question, and how to do it?
    Thanks
  • Feb 14, 2006, 05:11 PM
    CaptainForest
    A worksheet approach to answer that question? I don't think so. I guess you could if you really wanted to.

    I would answer this question in more of a word-based approach.

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