• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Accounts help businesses stay organised, on track to success and prevent cash flow problems

Extracts from this document...

Introduction

´╗┐Subject: Business Accounting Accounting is the recording of a business? financial transactions going in and out of the business. Within any business it is necessary to have an accounting system so that you can keep your finances in order, this is important as you will need to know what is coming in and out of your business to find out whether your business is making a profit, loss or breaking even. Accounting can help a business in many ways; it could point out information that is key to the businesses success such as the best and worst selling product, where the majority of the business is spending its money. It is a legal requirement for you to keep records of any transactions going in or out of the business, no matter how small they are, for at least five years. ...read more.

Middle

Many people use accounts for different reasons, some of them are: Managers, who use them to make informed decisions, make sure the business is making enough money to pay for wages, bills, stock and other demands. They need to make sure there is money saved for a rainy day. Employees can use accounts to see how well the business is doing in regards to the security of their employment. Owners and investors will use it to compare to different companies and think about whether they could put away excess money that isn?t being used. Suppliers can look at whether the business has enough money to pay for the materials they want to buy and whether it?s a good idea to have a contract with them. ...read more.

Conclusion

Financial accounting provides historic information about the business performance over a specific time period. This is for external users, including potential investors, shareholders, bank, suppliers and the government. This includes the preparation of financial reports that include a balance sheet, which shows the businesses assets and their liabilities at a specific point in time and income statement, which show the profits or losses, expenses over a certain period of time Management accounting focuses on information that is used internally; it is used by managers to improve decisions for the future of a business. This type of accounting will require monthly or weekly reports, these help make better informed decisions. Conclusion Accounts help businesses stay organised, on track to success and prevent cash flow problems as long as they are regularly monitored and managed properly. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Accounting & Financial Management section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Accounting & Financial Management essays

  1. Marked by a teacher

    Evaluate how Cash flow forecasts, Break even charts, Profit & Loss statements and Financial ...

    3 star(s)

    disposition and being able to renegotiate terms with others, such as banks or creditors. It is also a great document to show to people that may be interested in your business, such as shareholder, (Potential) investors, creditors and lenders. Since it can be helpful to show to a creditor, it

  2. Profit & Loss Accounts and Balance sheet.

    It has been worsened because payment days have been increased. This is because the customers who own capital to business are taking long to return the capital. Mr. Kong Han should take immediate action and encourage customers to pay on time because this will lead a poor relationship with suppliers.

  1. The final accounts should be a true reflection of the financial state of a ...

    This means that the business owner is able to make their business to look a lot better than it actually is. Sale and lease back Sale and lease back means that a company may decide to see its vehicle to a leasing company then the vehicle back for an agreed amount of time.

  2. Free essay

    Internal control report Marlene Enterprises. This report focuses on the internal control ...

    The cashier should be responsible with the daily banking so that there is only one employee who is handling the cash. Cheques should be signed by at least two authorised people within the business. The use of cheques is to prevent any misuse of cash and the cheque butts act as documentary evidences for auditing.

  1. A2 Business CourseWork

    KPI's: One of Tesco's KPI's is to 'Reduce CO2 emissions from existing stores and distribution centres by at least 50% by 2020.' This is Tesco trying to be responsible with their level of CO2 output. They also aim to reduce this by 5.5% in 2009.

  2. In this assignment I will be explaining in detail the importance of cash flow, ...

    The variable factor is that it could change due to the level of usage of the gas. Budgets Budgets are used to examine the income and the expenditure of a business over a long period of time. It also helps to get the best out of resources.

  1. Unit 5 D1 - example of how a business may deal with cash flow ...

    so they could have done overdraft agreements which meant that banks would offer overdraft facilities to them through this period when their cash flow was negative.

  2. Estimate the cost of equity appropriate for the evaluation of the incremental cash flow ...

    By gaining technological savvy, the company can use the same practices in other plants and reduce production costs. Company has developed the relationships with Collinsville existing customers. It is 6 more times cheaper to retain existing customer than acquire a new one.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work