Answer to Question #79839 in Finance for Luke Nash

Question

1)You have been asked to provide an accurate and up-to-date profit and loss report on work in process for a particular job. What data might you draw on, what reports might you need to access and how would you ensure that the information you provide is error free and comprehensive?

2)What is the importance of collecting, maintaining and providing accurate financial/ resource allocation records and reports?

Answer 1

1) The costs and revenues associated with the performance of a specific job must be recognized in the income statement as the work progresses, since this approach will allow reporting users to obtain useful information. The signing of the act of completed work (interest, certificate), as a rule, confirms the fact of the completion of the work stage, but is not the only evidence of the degree of readiness.
The method of interest-based readiness assumes that revenue is correlated with the costs incurred at this stage during the execution of a particular stage of work, while reporting information on revenues, expenses and profits that are attributed to the completed part of the work.
In order to guarantee the completeness and truthfulness of the information, it is necessary to access information in the income reports, re-verified using the original data, expense reports cross-checked with the source data, the revenue budget, the expenditure budget.
2) For the successful conduct of business, a prerequisite is the availability of accurate financial information. The quality of the organization of the process of collecting, storing and providing accurate financial reports and reports on resource allocation has a direct impact on the effectiveness of management decisions taken. That is, leads to the achievement of the company's goals and the maximization of its goals.