Accounting Is The Process Of Identifying, Measuring And...

Question 1) Accounting is â€Å"the process of identifying, measuring and communicating economic information to all stakeholders of a business’ (Drury,2008).† Most or all businesses require some sort of accounting to keep track of their business and to track progress of all information that’s linked to the stakeholders. There are two different types of accounting that is going to be looked at and how they vary from each other: Firstly, management accounting is â€Å"The process of preparing management reports and accounts that provide accurate and timely financial and statistical information† (management accounting, 2017) managers require management accounting for short term decisions and day to day business. Financial Accounting differs to†¦show more content†¦Financial accounting is done over the year so it is more carefully constructed and is more accurate than management accounting which is sometimes produces guessed findings and results, as managers do not have the time to produce exact numbers when required to make decisions. Question 2) â€Å"Break-even analysis entails the calculation and examination of the margin of safety for an entity based on the revenues collected and associated costs.† (break even analysis, n.d.) businesses use break-even to calculate how many units need to be sold to level out the amount of sale costs and profit gain. Managers use break-even as part of their business plan, because this allows the organisation to see how practical their business plan is going, and to decide whether it’s the right decision to continue perusing the idea. Even after the organisation has set-up their business plan, managers still use break-even to determine their unit prices, and promotional processes. The formula used for break-even is: Break-even Point = Fixed Costs/ (Unit Selling Price – Variable Costs) Organisations could work out the breakeven point in their business using a graph, fixed costs, variable costs, total costs and total revenue are involved inShow MoreRelated Cost Accounting: Its role and ethical considerations Essay1054 Words   |  5 PagesCost Accounting: Its role and ethical considerations Introduction: Accounting is the process of identifying, measuring, and communicating economic information about an entity for the purpose of making decisions and informed judgements. 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These three activities help the firm to operate the business to make decisionRead MoreEthical and Legal Obligations in Accounting1329 Words   |  6 PagesMarshall (2004), accounting is the process of identifying, measuring, and communicating economic information about an organization for the purpose of making decisions and informed judgements (p. 3). Specifically, financial accounting refers to the process that results in the preparation and reporting of financial statements for an entity (Marshall, McManus, Viele, p. 5). While many entities prepare their own financial statements, firms can also contract with a public accounting firm or a CertifiedRead MoreEthical And Legal Obligations In Accounting Essay1330 Words   |  6 PagesMarshall (2004), accounting is the process of identifying, me asuring, and communicating economic information about an organization for the purpose of making decisions and informed judgements (p. 3). Specifically, financial accounting refers to the process that results in the preparation and reporting of financial statements for an entity (Marshall, McManus, Viele, p. 5). While many entities prepare their own financial statements, firms can also contract with a public accounting firm or a CertifiedRead MoreWhat Are The Impact Of Human Capital Accounting On ShareholdersValue Of Oil And Gas Companies?1405 Words   |  6 PagesHUMAN CAPITAL ACCOUNTING AND SHAREHOLDERS’ VALUE OF LISTED OIL AND GAS COMPANIES IN NIGERIA Abstract This study evaluated the effect of human capital accounting on shareholders’ value in oil and gas companies in Nigeria. This is with a view to providing information on how costs incurred on personnel could be identified, measured and disclosed on the statement of financial position of companies as an asset which is the key factor to the successful operation in oil and gas industry. The study madeRead MoreWhy Accounting Is Basically A Language And Information About The Financial Position Of An Organization1721 Words   |  7 Pagesfunction† Accounting Introduction Accounting is basically a language: a language that provides knowledge and information about the financial position of an organization. When we study accounting we are basically learning this expert language. By learning this language we can analyse and understand the financial operations of any and all forms of organizations. The accounting information be broken down into three core categories: Operating Information Another term for operating information is â€Å"day-to-dayRead MoreAccounting Is The Key Financial Segment Of An Organization, Like Liabilities, Assets, And Capital1764 Words   |  8 PagesIntroduction According to Black (2009: 2), accounting can be defined simply as the recording, summarizing and interpretation of financial information. A more detailed definition is that offered by the American Accounting Association (1966), as follows: ’The process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information’. This means that, in terms of identifying, this should focus on the key financial segment of an organization