An employee may be asked to complete a general purpose financial report. This report is one that broadly shows the financial information pertaining to the business in question and is designed to be offered to all types of readers, not a specific group. When composing this type of report, an employee needs to know what it is commonly used for and what information goes into writing it correctly.
General Purpose Financial Report
A general purpose financial report is a general report that shows all of the financial information that pertains to a business. This is done to meet all of the needs of the readers, rather than those of a specific group of readers, such as investors, shareholders, business executives or budget planners. The name, general purpose financial report, indicates the report is a general observation of the company’s finances.
Common sections in a general purpose financial report include income statements, which cover income from investors and sales, cash flow statements, which cover all of the operational expenses the business has in order to operate and a balance sheet that shows how much the business owns as assets and how much it owes in liabilities.
Total estimates of various sections, such as expenses, assets and liabilities, also are offered in the general purpose financial report. For example, the company may have a long list of monthly expenses, which is needed to operate the business to its full potential. Instead of listing all of the expenses on several pages, the general purpose financial report offers total sums, so readers can see exactly how much is being spent each month.
There are numerous readers for a general purpose financial report, which means that it has several purposes. Shareholders and investors may analyze the information and data in the report to determine how the business is doing financially and whether investments made in the business are wise investments. If the report reaches the public, the public may read the report to see how the business is spending its money internally and to see how much the business is earning on products or services. Business executives may analyze the general purpose financial report to see if any changes need to be made to the budget to eliminate liabilities or cut expenses.