Introduction
Accountancy analyses information for a variety of purposes within the business, while finance is to do with the financial funds directly within the management. This report will be defining and explaining the terms and the purpose of ‘accounting’ and ‘finance’. As well as this it aims to cover the main aspects of what should guide those who work in these areas.
What is accounting?
Accounting is the recording of financial transactions plus storing, sorting, retrieving, summarizing, and presenting the information in various reports and analyses. (Averkamp, 2012)
From the research that I have conducted I have come to the idea that accounting is the basis of identifying, collecting and analysing financial data for businesses or for
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Accounting is based on two specific sectors, financial accounting and Management accounting.
Financial accounting
According to Obaidullah Jan, Financial accounting is a system that accumulates, processes and reports information about an entity 's performance (i.e. profit or loss), its financial position (i.e. assets, liabilities and shareholders ' equity) and changes in financial position. Every entity, whether for-profit or not-for-profit, aims at creating maximum value for its stakeholders. The goal of maximum value addition is best achieved when there is a mechanism to monitor the management and the board of directors. Financial accounting helps in such monitoring by providing relevant, reliable and timely information to the stakeholders, (Jan, Financial accounting, 2013).
Financial accounting is the recorded information for external users who are people outside of the organisation like investors and tax authorities which includes a report at the end of the year on balance sheet, income statement, cash flow statement, auditors report and director’s report.
Management accounting
Whereas according to the Institute of Management Accountants (IMA), "Management accounting is a profession that involves partnering in management decision making, devising planning and performance management systems and providing expertise in financial reporting and control to assist management in the formulation and implementation of an organization 's
Financial Statement Analysis is the process of reviewing and analyzing a company’s financial statements to make better decisions. These statement includes the Income statement, Balance sheet, Statement of cash flows and a statement of changes in equity.
Financial accounting is the branch of accounting that organizes accounting information for presentation to interested parties outside of the organization. The primary financial
The purpose of this paper is to define accounting, and identify the four basic financial statements. The paper also explains how the different financial statements are interrelated to each other and why they are useful to managers, investors, creditors, and employees.
Managerial accounting is defined as the activities carried out in a firm to provide its managers and other employees with financial and related information to help them make strategic, organizational, and operational decisions.
Accounting is the study of how businesses track their income and assets over time. Accountants engage in a wide variety of activities besides preparing financial statements and recording business transactions. These activities include computing costs and efficiency gains from new technologies, participating in strategies for mergers and acquisitions, quality management, developing and using information systems to track financial
Accounting 22. A technique that establishes the rules and procedures to record, quantify, analyze and interpret economic events affecting the heritage of any economic organization or entity providing information useful, reliable, timely, and accurate which aims to ensure financial control.
The term accounting refers to the process of measuring recording summarizing and analyzing the information recorded in the ledger. This helps the company plan and control the activities of the
Financial management is important to the organization because it provides pertinent finance and accounting information to help managers accomplish the purpose of the organization. Financial accounting provides accounting information to external users. On the other hand, managerial accounting is more for managers (internal users) to use for things like planning, budgeting, etc. The definition of finance has changed over the years, but it’s used to ultimately evaluate previous decisions and make assessments for future decisions of the organization.
Financial accounting statements can help a user to make future decisions by showing the concerned business’s health. It shows where money is being generated, spent and lost, depicting the financial performance and financial position. The statements can also help in situations such as raising fresh capital in the form of a loan, e.g. a bank will most likely require these statements to show the business’s credibility or worthiness. The statements help influence managerial decisions on which direction the business needs to head, and how to best maximize profit.
The main purpose of financial accounting is to prepare financial reports that provide information about a firm’s performance to external parties such as investors, creditors, and tax authorities. Must be performed according to GAAP (Generally Accepted Accounting Principles) guidelines.
In this assignment paper, I would like to describe the meaning of accounting, how accounting
Financial accounting is a crucial process for any successful business. Atrill and McLaney, 2013 define financial accounting as: “the identification, measurement and communication of accounting information for external users (those users other than the managers of the business).”
Accounting is the language of business. It is a profession that is being guided by principles, concepts, conventions, laws, etc. All these fundamental building blocks serve as common and general compasses to all practitioners of the profession. In some cases, they are nation-wide tailored, while in other cases, they are universally tailored. Accounting as a living, practical, dynamic and realistic profession covers so many areas of social, economic (business), and governmental activities. Surely, any endeavour that involves monetary and material activities create a room for the services of Accounting. Many of the human endeavours for which the accounting profession plays significant (some times inevitable) roles include; Banking, Insurance, Manufacturing, Farming Contracting, Oil and Gas, Mining, Transportation (Air, Land and Sea), Educational Institutions, Churches, Ministries, ICT, Hire Purchase, Local Government Authorities, Estate Businesses, Export and Import Businesses, Bill of Exchange Transactions, Royalties Transactions, Consignment Transactions, Stock Market Transactions, Sports, Entertainment, Hospitals and Hospitality Industry, etc.
Accounting is the analysis of a company’s liabilities, assets and equity. Accountants must accurately create financial statements such as balance sheets and income statements. Financial statements are a record of all financial activities for the business. They are viewed by both outsiders and insiders, and are the blueprint for how the company is doing financially. It is very important that financial statements are accurate for many reasons. Outsiders include the Internal Revenue Service, shareholders and investors. The IRS requires that these financial statements are in ordnance of the Generally Accepted Accounting Principal, or GAAP. Failure to do so will result in a heavy fine and possible jail time. Investors want an idea of how financially sound a company is before they invest. Insiders, including management and owners, use these
Accounting can be defined in a number of ways, but I chose the book definition, which is; Accounting is an information system that provides reports to stakeholders about the economic activities and condition of business. The person in charge of accounting is called the accountant. The accountant is typically required to follow a set of rules and regulations. These rules and regulations are called the General Accepted Accounting Principles. Throughout these next few paragraphs, I will be giving you the history and evolution of accounting, and I will be explaining who the stakeholders are and what type of information they require, and I will be explaining the role of accounting in business. There will be many examples and type of business