The Role Of Accounting Of Business And Our Society Essay

When you’re looking at the income statement, you can get information about profitability for a particular period. This is also called the profit and loss statement. The income statement is composed of both income and expenses. This statement can be used to deduct expenses from income and report either a net profit or net loss for that period. This statement will deduct all expenses from income and then report your net profit or net loss for that period. This will allow the business owner to determine if the business is bringing in a good amount of revenue to make a profit. The cash flow statement shows the movement in cash and balance over period. The cash flow can vary depending on the operating activities, investing and financing activities. This statement provides one business owner with insight to the company’s liquidity which is vital to the growth of the business. Reinvesting in business is very important, looking at the statement of retained earnings will tell a business owner how much were reinvested in the company. After profitable period, every big business has to give some of its profits to stockholders, and keep the rest amount as retained earnings. Out of all statements, retaining statement is important to companies that sells stocks to the public. This statement can also provide you with assets and liabilities information. These informations can be used to assess the financial health of your business. The results of a balance sheet will help the business owners to show the risk of liquidity and credit. Looking at these information you can measure trends and relationships to show where in the areas you can improve. These can also be compared to similar companies to show how the business measures up to leading competitors (Ali, 2010). In summary, the financial statements can provide a business owner

An income statement shows a firm’s sales revenue and expenses over a period of time, such as a month, quarter, or year (Melicher & Norton, 2014, pg 319). The purpose of an income statement is to help company decision makers evaluate the firm’s current situation and make changes as needed (Reeves, Unk). Income statements also help creditors make decisions on loans they might supply to the company (Reeves, Unk). Finally, income statements assist stock investors in deciding whether the company would make a good investment (Reeves, Unk).

     The nature of work of accountants and auditors is to prepare, analyze, and verify financial reports and taxes, and monitor information systems that furnish this information to managers in business, industry, and government. The major fields of accounting are Public accountants who have their own business or work for public accounting firms. They perform a large range of responsibilities such as doing taxes, numerous accounting and auditing, consulting activities for their clients, who may be corporations, governments, nonprofit organizations, or individuals. Management accountants also called industrial, corporate, or private accountants record and analyze the financial information of the companies

Financial statements are the result of the accounting information system summarising and putting them in a form that is useful to decision makers. The four essential financial statements used for financial reporting are the income

Each type of financial statement has its own use to the public, shareholders and potential investors, they perform different roles.

Because financial statements are accounting reports, one of their purposes is to communicate financial information about a business entity to investors and other interested parties. Financial statements provide information on the business' financial position or status as well as financial changes during a period of time. They communicate to investors information about financial decisions that have been made (Woelfel, n.d.).

Income Statement by a company is the information on the financial statement of a business activity over a certain period of time usually a quarter or a year. It also explained how much revenue the business grew throughout a period of time and the cost it gained in relating to its revenue. Companies have to be able to bring money otherwise they would not be able to stay in business; therefore income statement show how well or how bad the company is doing.

Duties for both accountants and auditors include analyzing and preparing financial documents for completeness and accuracy. They also brainstorm ideas to decrease costs or expense to increase overall profit. Businesses and corporations are required to display their financial standings publicly by law so potential

The first of the important financial statement documents is the income statement. According to our text (2014) the purpose of the income statement is to “report the revenues generated and expenses incurred by a firm over an accounting period, such as a quarter or a year.” Essentially, the income statement allows a general snapshot of what a company makes and spends for a specific period of time. Harold Averkamp of AccountingCoach.com (2015) sums up income statements best with, “The income statement is important because it shows the profitability of a company during the time interval specified…People pay attention to the profitability of a company for many reasons.

Financial statements provide information of value to company officers and various external parties, such as investors and lenders of funds. Publicly owned companies are required to publish general-purpose financial statements that include a balance sheet, income statement, and statement of cash flows. Financial statements issued for external distribution are prepared according to generally accepted accounting principles (GAAP).

Accountants can also hold advisory positions. They offer imperative information, either directly or indirectly, about not only running a successful company but making it thrive. Without a good team of accountants, day to day business won’t be functioning correctly and business won’t grow and it will not flourish.

What is an accountant? An accountant is a person whose job is to make sure financial accounts are going well with the company. After completing an accounting internship I thought accounting is an amazing career to go into because you get to experience how companies deal with their money and how they make their income. Accounting is often viewed as a boring career because all you do is deal with numbers but in reality is an interesting job to perform if you would like to be a part of the process that makes a company or firm keep functioning. Every business needs an accounting system, from a simple small store to the largest company, they all need to track expenses and income. Accountants are responsible for many duties some of which, according to the National Center for O*NET Development are to,

There are some main objectives of financial accounting which prepare its financial statement in which cash flow statement, income statement and the balance sheet are include.

The Accountant is in-charge of the efficient and effective operation of the Finance Division of FAM and reports directly to the CEO. The responsibilities of the Accountant include:

A financial statement (or financial report) is a formal record of the financial activities of a business, person, or other entity. In British English including United Kingdom company law a financial statement is often referred to as an account, although the term financial statement is also used, particularly by accountants.