A financial transaction is a business event that involves at minimum two parties and impacts the finances of those parties. At least one of the parties will change the amount of funds on its accounts (assets or liabilities). The timing of financial transactions could vary depending on whether an entity adheres to accrual or www.boardroomplace.org/benefits-of-succession-planning cash accounting guidelines. The choice of these accounting methods impacts the reporting and taxability.

Stakeholders depend on financial statements to assess the performance of a company and their investments, including shares and loans. All organizations must ensure that their financial transactions are honest and transparent.

Each financial statement’s goal is to give information that will allow stakeholders to understand the current situation and future goals of the company. Financial statements could include an income statement, a balance sheet statement and a cash flow statement. The first two are static snapshots which show a company’s financial standing, whereas the third one is a forecast based on the current trends.

The ability to provide accurate and transparent financial transactions and reports is a arduous process. Accounting journals are the simplest method of recording a financial transaction. Each entry is manually entered by accountants. It is tedious and likely to be prone to errors.

A unified financial report also referred to by the term consolidated financial statement, is an alternative. The report reveals the combined results of all financial transactions at every institution within a university. By substantiating every transaction at the time of entry, and examining all material transactions quarterly, the university is able to create consolidated financial reports which are free of any significant mistakes.