Working with Financial Statements

Accounting is the methodical and full recording of financial transactions relating to a business, and it also denotes to the procedure of briefing, examining and evaluating these transactions to cross checking agencies and tax collection agencies. Accounting is one of the key purposes for nearly any company. It may be done by an auditor and accountant at small businesses or by substantial finance subdivisions with lots of employee’s at

Reported revenues under accrual accounting most of the time do not match cash receipts during the period. Accrual accounting provide a more accurate measure of the economic value added than cash flows.

But with your corporation these would not be taken into consideration and with your corporation, Mr. Jones, the recommendation is the accrual method of accounting. With the accrual accounting method, the revenue is recorded when it is earned and not when the money is received. The expenses are recorded when they occur not when the payment

In this assignment paper, I would like to describe the meaning of accounting, how accounting

In accrual accounting, we recognize revenues when they're earned and expenses when they're incurred. When you immediately record the expenses, you are matching them with the revenue those expenses helped produce. Take for example, materials and labor are the expenses incurred to provide the services reflected in the revenue they are matched against.

The accrual concept in accounting represents the expenses and incomes that are made in the period they take place, involving cash payments at the same time. The advantage side of the accrual approach is that financial statements include all the expenditures of the reported revenues for an accounting period.

In conclusion, the accrual accounting basis is widely used in the preparation of financial statement because it is more objective and realistic to recognise revenue and expenses when they are incurred, even though no cash has actually changed hand. Therefore the profitability of a business is outstood very clearly in the financial statement. However, accrual basis is complex, and the cash at bank balance does not reflect to net revenue. In credit sales transaction, the event of delivery of goods or services, does not occur at the same time as the invoice receipt from debtors. Doubtlessly, it is a good measure for the profitability, but for cash-flow and liquidity, it may not be reliably useful. An alternative method of accounting basis, the cash basis, can be used in preparing the financial statement. The cash basis recognises revenues and expenses according to the real-time cash flow. This simply means that the transactions are recorded when cash

Accounting relates to all a business does and is seen in every aspect of a business whether it is small or big and general. Whether one is a customer or has a job in a business, when looking into a company and seeing the steps and procedures a business does whether it be externally interacting, or in the books , I can now see how every decision either the customer takes or the business does affects different aspects of the businesses accounts. The accounting topics covered are the Accounting Cycle; the steps that account for recording all types of transactions in the books. Merchandising Operations; involve the inventorial decisions businesses make on the daily basis and the tracking of inventory. Internal Cash and Control; is the safeguarding of cash, efficiency of operations and reliability of the books. Receivables; the promises of payments on account, the advantages of getting paid or risks of not getting paid in the future. Plant Assets, Natural Resources and Intagibles;… .

*"Accounting is a set of principles and procedures relating to the registration and compilation, analysis and interpretation of financial data for the purpose of determining the outcome of business and its financial position".

Accounting is referred as an art of collecting, classifying, and manipulating financial data for organizations and individuals. It is also used to determine financial stability or financial health of organizations. Accounting is the language of business and figures and is widely used as a means of communication for financial world, without it businesses cannot survive. It is important because it helps in analyzing, decision making, information disclosure and it also helps in finding out the frauds and in avoiding them.

According to Weygand, Kieso and Kimmel (2012, p.4), the main purpose of accounting is consists of three basic activities, identifying, recording and communicating the business events by users. These three activities help the firm to operate the business to make decision be meaningful. Business has closely connection when doing transaction with their stakeholders by using the accounting, in order to make maximize profits.

Accounting is defined as the process of measuring, identifying and communicating economic activity. The main function of Management Accounting Information is to make information available to various management to help for decisions of how to allocate scares resources within a company, in other word, for decision-making. Management Accounting is the accounting system that intends to be used in the management performance evaluation and management decisions to provide information to the decision makers inside the entity, such as managements. Since Management Accounting Information is mainly used in the company 's internal workers, it doesn’t necessarily to follow the law or any official form, unlike financial accounting. It is characterized by being created in a format of each company’s perspective.

Accounting, which is also known as accountancy is a “language of business”. It provides financial information about one’s business to the internal and external users such as managers, investors, creditors and etc. Users need information to help in planning, decision-making, evaluating and controlling their business or investment. The information is generally in the form of financial statement where they can show where the money is spent, helps to assess performance over a period and helps to identity problems and opportunities. Users also use the financial information to make resource allocation decisions between and within companies, organizations and public agencies. Accounting involves the process of recording, verifying,

Accounting is the means of providing the financial information of any given organization. It summarizes all the company’s transactions and provides a clear image of the business. Accounting keeps the record of all financial reports which is very important for all the managers and stake holders like share holders, creditors or owners. Every country has its own set rules and follows their own accounting standards. (Duquesne University, 2006).

The modern business environment has evolved considerably during the past 10 years. Business technology tools have advanced up to levels which were practically impossible before. Today, Accounting is called “the language of business” because it is the source where all financial information comes from. However, Accounting is based on certain rules which all accountants must adhere. These rules are based on the Accounting standards and Accounting concepts. They form the framework and are the guidelines for good accounting practices.