ACC 561 Week 2 Discussion: Accounting Transactions and Concepts
Discussion Topic for ACC 561 Week 2 Discussion
Post a total of 3 substantive responses over 2 separate days for full participation. This includes your initial post and 2 replies to other students or your faculty member.
The objective of the financial statements is to provide information that is helpful in assessing the amounts, timing, and uncertainty of an organization’s cash inflows and outflows. This is shared in the Statements of Financial Accounting Concepts from the Financial Accounting Standards Board (FASB). This is the goal of accounting.
The reason is simple, these three points are the basis for determining the present value of the company. The formula is PV=CF/(1+i)^n where PV is the present value, CF=net cash inflows, n=timing, and i (interest rate) is based on uncertainty. As managers if we can increase cash flows, get the money faster, or lower the uncertainty, the value of the company goes up.
How does this help determine what we track in accounting?
Reply to at least 2 of your classmates. Be constructive and professional in your responses.
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