Overview Of Accounting

Overview Of Accounting

Overview of Accounting



MBA 503

01-18-10
James Sullivan

Overview of Accounting

    In looking at an overview of the accounting process the focus needs to be on two key areas.   This paper will discuss two key areas in the accounting process.   First, the audience, purpose and nature of financial statements and managerial reports will be identified and discussed. Second, the use of accounting and financial information in regard to making informed and ethical business decisions will be explored.
    This information is presented today as information only so you can apply it to your small business.   Hopefully you will find the information informative and helpful to your application.
    A financial statement is “finance, banking, and accounting, summaries of accounts to provide information for interested parties. The most common financial statements are: trading and profit and loss account; profit and loss appropriation account; balance sheet; cash-flow statement; report of the auditors; statement of total recognized gains and losses; and reconciliation of movements in shareholders' funds. See also annual report.” (Business, 2006).   A financial statement or managerial report it a summary of all of the key monetary factors of the current financial health of the company.
    The audience of a financial report is either internal or external.   Internally the employees, managers and decision-makers in a given company need to have access to the financial reports in order to make informed decisions for the company.   These decisions could be whether to grow or expand, whether to spend or save, or whether to hire or downsize.   An internal audience will use the statement as a tool to evaluate the current state of the company and take appropriate action.
    Externally, the audience of a financial report is first the stockholders of the company.   The interest in the financials of the company is useful to them in that they know if they are investing their...