Financial Accounting
The reasons companies create and maintain accounting systems
Accounting is the language of business. The ability to record transactions is critical for companies in regards to keeping track of critical performance metrics. The subsequent management of revenues and expenses is critical for the sustainability of the business. Accounting systems, therefore, are needed for accurate assessment of business progress. Businesses create these systems to help facilitate their overall strategic objectives. For instances, if accounts receivables are high, management may be inclined to increase credit terms to discourage customers from borrowing. A natural reaction from this strategic move could possibly be an increase in customers paying in cash. Through tightening credit, management was able to avoid potential delinquencies while increase the cash on hand. These decisions can be made through accurate and timely accounting systems.
In addition, accounting systems can help businesses determine methods by which to improve operations. Aspects such as inventory turnover and expenses can be tracked using accounting systems. In many instances, investors demand a required rate of return for their investment in a business. Through proper accounting systems, management can better ascertain areas that may need improvement, ultimately helping to generate high returns. For example, financial firms are using accounting systems to reduce the overall cost structure of their businesses. Many large financial firms are announcing job cuts, expense reductions, or divestitures. All of which will help drive businesses earnings and investor returns. Accounting systems are need in these instances to help facilitate the decision making process
The basic structure of assets, liabilities, and...
Financial Accounting The question is missing a clause. "…is more conducive to ethical behavior" than what? The word "more" invites comparison but there is nothing to compare the current environment to. Well, the current environment is not much different than any past environment. The regulatory environment does not dictate ethics, as ethics exist distinct from laws. Ethical behavior rests on how society itself defines ethics, and is only loosely related to
Financial Accounting Regulatory Compliance The roles of the Board of Directors and Chief Executive Officer of a public company are invaluable in establishing an ethical environment that generates quality accounting and reliable financial reporting for shareholders and investors. In fact, their involvement in this important issue largely pertains to corporate structure and corporate governance. Understanding that structure requires cognizance of the fact that when a company is publicly traded, it is
The statement also outlines its scope. For example, it outlines that the rules governing the valuation of financial instruments are to be used, even with investment companies. Though investment companies are subject to other rules and guidelines, they must still use Statement No. 157 guidelines when preparing their financial statements, for the ease of comparability. The fair value methods should be used quarterly, as per this statement. This is especially true
Financial Accounting for Management) Dell Inc. is considered to be a multinational technology business that is in the process of developing, manufacturing, sells, and supporting personal computers and other computer- associated products. Founded in Round Rock, Texas, Dell services somewhere around 76,500 people all over the world as of 2012. Dell had gone through their growth process during the 1980s and 1990s to turn into (for a time) the major seller
Managerial and Financial Accounting Case Managerial Accounting - Variable Costing Managerial accounting emphasizes short-term profit analysis, income statement important. Consequently, 'll examine discuss income statements case. Managerial and Financial Accounting Financial and managerial accounting basic difference comes on the uses. While, financial accounts are prepared for use by external parties, managerial accounts are prepared for use internally. The process of preparing the accounts in both financial and managerial accounting use similar source for
Accounting What is Accounting Accounting is a term which is usually referred to when there is a formalized manner to hold an individual, firm or other organization to account. The process of accounting will usually involves the collection of data that measures or quantifies actions or transactions, to allow for an evaluation or assessment of performance. The most common type of accounting will be used to measure and quantify financial data. A
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