Tumblelog by Soup.io
Newer posts are loading.
You are at the newest post.
Click here to check if anything new just came in.

January 02 2018


The Idea of Accounting

Accounting is definitely an information system which identifies, records, analyzes interprets and communicates auto data of an financial entity. Accounting consists of three basic activities - it identifies, records, and communicates auto events of an organization to interested users. Let's take a closer look at these three activities.
Identifying Economic Events: Many events are happening daily in business. Some of them are affecting financial position from the business whereas, some don't. Events affecting budget of a business i.e. Assets=Liability+ Owner's Equity, are known as Economic events and said to be recorded in accounting system. To identify economic events; a company selects auto events strongly related its business. Instances of economic events would be the sale of snack chips PepsiCo, Providing of telephone services by AT & T, and payment of wages by Ford Motors Company. Types of non-economic events of exactly the same companies could be appointing a whole new manager by PepsiCo and departure of a trusted employee from AT & T.

Recording Economic Events: Each company like PepsiCo identifies economic events, it records those events as a way to supply a good reputation for its financial activities. Recording consists of keeping a planned out, chronological diary of events, measured in dollars and cents. Recording comes by having a process called double entry accounting system. The device is made up of recording, summarizing, checking mathematical accuracy and preparing statement of economic position.
Communicating Consolidate Financial Data: Finally, PepsiCo communicates the collected information to interested users by way of accounting reports. The most frequent of those reports are known as Financial Statements. Parties interested into business's financial information can be classified into three main categories. The your list are Internal, External and Government. To really make the reported financial information meaningful, PepsiCo reports the recorded data in a standardized way. It accumulates information resulting from similar transactions. As an example, PepsiCo accumulates all sales transactions over a certain time frame and reports the data as one amount inside the company's financial statements such data are said being reported inside the aggregate. By presenting the recorded data within the aggregate, the accounting process simplifies many transactions and constitutes a series of activities understandable and meaningful.
A vital aspect in communicating economic events could be the accountant's capability to analyze and interpret the reported information. Analyses involve utilization of ratios, percentages, graphs, and charts to highlight, significant financial trends and relationships. Interpretation involves explaining the uses, meaning and limitations of reported data.
For more info about thu thuat excel web portal: this site.

Don't be the product, buy the product!