Accounting Essay - 1320 Words

Accounting Accounting is the practice of â€Å"†¦maintaining, auditing and processing financial information†¦Ã¢â‚¬  (http://en.wikipedia.org/wiki/Accounting) for the purpose of a company, persons or organisation. There are some fundamental parts of accounting which are; â€Å"Identifying, measuring and communicating† (Black, 2000). You need to identify the important financial sections of a company, person or organisation which will include the companies assets, liabilities, capital, income and of course expenditure. You will also need to measure â€Å"†¦ monetary values of the key financial components in a way which represents a true and fair view of the organisation† (Black, 2000). Finally there is the communication side of accounting, it is vital that a†¦show more content†¦Lenders would want to make sure that the company is in a strong financial position to repay on time any monies lent to them. Similarly for suppliers they would like to be assured that any supplies ordered would be paid for once delivered. Customers on the other hand would want to make sure that any orders made between themselves and the company would be delivered. Prospective buyers of a company would want to check out the financial state of a company before considering making a bid for the company. The Government uses the information gathered within a company’s accounts to asses the amount of tax a company would have to pay and the information is also used to assemble National Economic Statistics and of course a rival business would be interested in the published accounts of a particular company, person or organisation as they would want to find out how well the competition is doing and whether it would be worth trying to compete financially if the company, person or organisation is a successful one. A Company’s owners would be interested in the accounts as they would want to know if their c ompany was making a profit or a loss and also where the companies money was being spent, Shareholders would want to make sure that their shares are increasing and not decreasing inShow MoreRelatedAccounting1024 Words   |  5 PagesQuestion 1:   * Proficient-level:   * There are several important functions performed in an organization, among which accounting is one of them. Define the accounting function and discuss how it differs from double-entry bookkeeping. 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