The Need To Monitor Activity Management Of The Business Measurement Of Financial Performance

Submitted By Asmodeelul1
Words: 577
Pages: 3
Open Document
purpose of the accounting. Describe the purpose of the accounting: The need to record transaction the requirements to monitor activity Management of the business Measurement of financial performance What is the accounting?
Purpose of accounting.

The purpose of accounting is to accumulate and report on financial information about the performance, financial position, and cash flows of a business. This information is then used to reach decisions about how to manage the business, or invest in it, or lend money to it. Accountants develop systems and processes to evaluate and analyse different types of transactions. Each transaction that involves the acquisition or sale of goods and services must be reported in the general ledger and posted to relevant accounts. Bookkeeping is the function of accounting that helps maintain these types of transactions as debits and credits; this data can then be used to create accurate and timely financial reports.

The need to record financial transactions.

Companies keep record of their financial transactions, There are a number of reasons why recording your transactions is so important. The first being that when you keep close track of all of your transactions you are ensuring that you know where your money is coming from along with where its going to. Companies also need to record their transactions in order to keep track of their budget, if you have no idea where you are spending money it becomes much more difficult to make a budget and stick to it. Also, Shareholders read accounts to examine the health of business, and the returns (dividends) that they can expect to make. Employees read accounts to see how safe their jobs are. The Inland Revenue read accounts to calculate how much tax businesses should be paying. Suppliers read accounts to check that the company they supply with goods on credit will be able to pay the money owed when it becomes due. Financial information can be fed to those who require such information for decision-making and record-keeping purposes. For example, managers need information in order to manage the business efficiently and constantly to improve their decision-making capabilities. Shareholders need to assess the performance of managers and need to know how much profit of income they can take from the business. Suppliers need to know
Show More

Related Documents: The Need To Monitor Activity Management Of The Business Measurement Of Financial Performance

Discussion Financial Reporting Environment And GAAP

Discussion Financial Reporting Environment and GAAP Generally Accepted Accounting Principles (GAAP) The role of generally accepted accounting principles (GAAP) in the preparation of financial statements is a set of guidelines that inform businesses how to properly record accounting information in a fair and consistent manner. “Is a rule” to meet that requirement, statements are prepared in accordance with GAAP, which encompasses the conventions, standards and procedures, necessary to define accepted accounting…

Words 440 - Pages 2

General Accounting Principles Essay

Generally Accepted Accounting Principle Paper Maria Cecilia Blancia University of Phoenix HCS/571- Financial Resource Management Joseph Rudd January 19, 2015 Introduction Many health care organizations today are facing challenges on how to manage and operate financial information. Some of the generally accepted accounting principles used in the past may not as effective to tackle the current issues in dealing with the dramatic changes in health care competition, government regulation…

Words 873 - Pages 4

Reporting Practices Essay

Reporting Practices and Ethics HCS 405 January 15, 2015 Reporting Practices and Ethics The Four Elements of Financial Management The four elements of financial management involve controlling, decision making, organizing, and original records. The Controlling involves management’s responsibility to ensure that the unit follows organizational plans and objectives. Controlling also involves studying current reports, comparing them with previous reports, and using the information to determining better…

Words 507 - Pages 3

Financial Statements and John Wiley Essay

INTERMEDIATE ACCOUNTING TENTH CANADIAN EDITION Kieso • Weygandt • Warfield • Young • Wiecek • McConomy CHAPTER 1 The Canadian Financial Reporting Environment Prepared by: Dragan Stojanovic, CA Rotman School of Management, University of Toronto CHAPTE 1 R The Canadian Financial Reporting Environment After studying this chapter, you should be able to: • Explain how accounting makes it possible to use scarce resources more efficiently. • Explain the meaning of “stakeholder” and identify key stakeholders…

Words 1760 - Pages 8

Accounting Information For Decision Making

CHAPTER 1 ACCOUNTING: INFORMATION FOR DECISION MAKING OVERVIEW OF BRIEF EXERCISES, EXERCISES, AND CRITICAL THINKING CASES Brief Exercises B. Ex. 1.1 B. Ex. 1.2 B. Ex. 1.3 B. Ex. 1.4 B. Ex. 1.5 B. Ex. 1.6 B. Ex. 1.7 B. Ex. 1.8 B. Ex. 1.9 B. Ex. 1.10 Exercises 1.1 1.2 Topic Users of accounting information Components of internal control Inexact or approximate measures Standards for the preparation of accounting information FASB conceptual framework PCAOB COSO Professional…

Words 5833 - Pages 24

Health Care Ethics Essay

Reporting Practices and Ethics There are four elements of financial management. These four elements are planning, controlling, organizing and directing, and decision making. In planning the financial manager determines what steps are necessary to meet the organizational goals. Distinguishing goals and how to achieve these goals is planning. The manager ensures that the company takes these steps and follows them accordingly in order to meet the goals set forth by the organization. Reviewing current…

Words 1191 - Pages 5

Essay about Financial Management of Health Care Organizations

Running head: FINANCIAL MANAGEMENT OF HEALTH CARE ORGANIZATIONS Financial management of health care organizations Name: College: Date: Introduction Healthcare managers participate in various important roles that allow them to form and maintain flourishing organizations. Managers ought to be aware of the decisive elements of management and the generally accepted accounting principles. At the same time, they must realize, stick to, and put into effect the general financial ethical standards…

Words 1329 - Pages 6

Business Plan Essay

Etymology[edit] Both the words accounting and accountancy were in use in Great Britain by the mid-1800s, and are derived from the words accompting and accountantship used in the 18th century.[12] In Middle English (used roughly between the 12th and the late 15th century) the verb "to account" had the form accounten, which was derived from the Old French word aconter,[13] which is in turn related to the Vulgar Latin word computare, meaning "to reckon". The base of computare is putare, which "variously…

Words 1955 - Pages 8

Auditing Essay

Solutions to Problems 2-24 Brief Description of Generally Accepted Auditing Standards Sally Jones' Actions Resulting in Failure to Comply with Generally Accepted Auditing Standards General Standards: 1. The auditor must have adequate technical training and proficiency to perform the audit. 1. It was inappropriate for Jones to hire the two students to conduct the audit. The examination must be conducted by persons with proper education and experience in the field of auditing…

Words 1410 - Pages 6

Accounting: Generally Accepted Accounting Principles and Cash Accounting Essay

Accounting Rusty Stevenson Acc. 290 Andy Knowlton University of Phoenix March 28, 2013 Accounting Commercial accounting and generally accepted accounting principles, generally describe the accrual basis of accounting over the cash basis. The differences in accrual and cash accounting can become confusing. The ability to differentiate between the two is important in the accounting world. Accrual accounting is defined as an accounting method which, measures the performance…

Words 373 - Pages 2