Accounting and Finance
In this article, we will start focusing on business accounting and financials. Some common terms heard in the workplace are Financial Accounting, Managerial Accounting, financial management and accounting policies.
Think of an organisations objective as to make profit and create wealth for stakeholders of the business. Accounting helps to show how the business is doing, where it is placed, what it is worth and more importantly the future prospects.
Financial accounting is mainly for external reporting of information, such as profit and loss, balance sheet and cash flow statements. Managerial accounting is for internal uses of financial information for decision making. The management need to ensure adequate return bearing in mind the risks and resources used.
The Accountant has a very important role to collect money, record through book keeping, summarise and interpret data for forecasting and planning.
Consistency of reporting is very important to ensure a clear view of the comapny yr-yr or period-period. Do not recognise profits ahead of sales and ensure a cautious view to make allowances for future problems; this is prudence.
Businesses are required to draw up policies that it intends to adopt for financial reporting. These accounting policies must meet the standards set by the regulatory bodies.
Subscribe to the FREE CorCoach business course, combining easy to follow articles and activities.Tags:accounting policies,Financial Accounting,financial management,Managerial Accounting