Financial Reporting System and Financial Reporting procedures

The Financial Reporting System

● The primary recipients of financial statement information are external users, such as
stockholders, creditors, and government agencies

Sophisticated Users with Homogeneous Information needs

● They are prepared on the proposition that the audience comprises sophisticated Users with
relatively Homogeneous Information needs.

Financial Reporting Procedures

● The final step in the overall accounting process that begins in the transaction cycle
The followin steps occur:

1. Capture the transaction

2. Record in special journal
3. Post to subsidiary ledger
4. Post to general ledger
5. Prepare the unadjusted trial balance
6. Nake adjusting entries
7. Journalize and post adjusting entries
8. Prepare the adjusted trial balance
9. Prepare the Financial statement
10. Journalize and post the closing entries
11. Prepare the post-closing trial balance