How Business Is A Business

2765 Words12 Pages
When it comes to properly running a business there are many things that the owners of the business, regardless of the size of the business, have to keep in mind in an effort to thrive and develop profits to ultimately grow and succeed in an intense business world. These important things include how they want to assign costs throughout the business and how they want to create there financial reports. These specific decisions that the owners and higher level employee of these given businesses are decided with many things in mind such as the size of the business, how they want to represent the business and many other things with regards to the specific business at hand in an effort to make the business as profitable as possible but also able…show more content…
This shows that management should keep in mind every possible outcome of the decisions they make and ultimately should make decisions that will help the business for the long term instead of taking the business one accounting period at a time. Keeping in the mind importance of even the smallest decisions that management may have to face on a daily basis, integrating a different kind of cost and attempting reduce as many constraints as possible is a very important decision. When it comes to integrating ABC costing rather than traditional costing, businesses are implementing a more accurate and specific costing method than they would get if they went with traditional costing methods. GAAP allows for traditional accounting methods. This is a big deal because by using the ABC method rather than using traditional accounting method allows a more transparent and accurate costing approaches. Using ABC allows management and the other higher level employees see where money is coming from and specific expenses are made and thus give them the ability to make proper alterations to the way certain events are carried out throughout the daily process of the business and thus give management an opportunity to improve their profits and the way they do business. With traditional accost methods however, there is less accountability on specific
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