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

Accounting is the practice of "...maintaining, auditing and processing financial information

Extracts from this document...


Accounting Assignment Helen Clayfield Emma Carnell Foundation Degree Business Accounting is the practice of "...maintaining, auditing and processing financial information..." (http://en.wikipedia.org/wiki/Accounting) for the purpose of a company, persons or organisation. There are some fundamental parts of accounting which are; "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 "... 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 company, person or organisation can communicate all of the financial information gathered so in turn users, whether they are internal or external, will be able to receive the correct financial information and be able follow it. There are two forms of accounting they are Financial Accounting and Management Accounting. Financial Accounting is concerned with the preparation of financial accounts for the benefit of people outside a company or organisation. Management Accounting is financial information used by managers within a company or organisation to make financial decisions based on the information that the accounts provide. There are many people who would be interested in company's accounts, they are divided up into two groups; External Users and Internal Users. ...read more.


A Balance Sheet is a summary or statement not an account of a company, persons or organisations financial statements showing the assets, liabilities and capital of the company that is what a business owns (assets) and what a business owes (liabilities), these statements are usually prepared at the end of a Fiscal or Financial Year this is a 12 month period used to annually calculate financial reports the 12 month period however does not have to be a calendar year i.e. from January to December, however a balance sheet unlike a profit and loss account only applies to a particular time and not the whole period so as it informs a business of its financial position a balance sheet can be done at the end of a day, month or year. The balance sheet has two separate sections one is Assets which is written as a Debit(DR) entry the other side is Liabilities which is written as a Credit(CR) entry each of these two sides must of course balance, if the accounts do not balance then that means there is a discrepancy within the balance sheet somewhere. A balance sheet can be written in two different formats the first is known as a Vertical Format which when the information contained within the balance sheet is written down the page the second is the Horizontal Format which is when the information is written across the page. ...read more.


There will always be one Debit (DR) entry and one Credit (CR) entry made. A Debit entry would be made if there was an increase for example in any of the following; Assets, Drawings, Accounts Receivable, these are debts that are owed TO a company, person or organisation but as yet have not been paid, Expenses and Losses of course if there was a decrease in any of the above it would be a Credit entry. A Credit entry would be made if there was an increase in any of the following for example; Liabilities, Accounts Payable which are debts owed BY a company, person or organisations which, at present have not been paid, Capital, Income and finally Revenue and as before if there was a increase in any of the above it would be a Debit entry. For example if a company, person or organisation was to purchase a fixed asset such as a building or piece of machinery this would be an increase in that company, person or organisations assets and would therefore be a Debit entry, the other side of the entry would be a Credit entry as there would be a decrease in the bank account of the company, person or organisation. The Double Entry Bookkeeping is essential in order for a company, person or organisation to keep track of all financial transaction as Double Entry is a very detailed financial account and everything that comes in or out of the business is written in a Double Entry Account. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Accounting & Finance 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 GCSE Accounting & Finance essays

  1. Compare the final accounts of two organisations explaining the similarities and differences.

    time, such as good purchases and sole during the period, rent, salaries etc. This accounting concept will help the business in: * Predicting the future prospects of the business * It helps in calculating tax on business income calculated for a particular time period * It also helps banks, financial

  2. Unit 5 Introduction to Accounting

    There are many types of scheme, some of these involve contributions by both the employer and the employee, in this case the pension becomes another expense for the company. Selling and distribution costs There is also a range of costs associated with selling the products or services which a business produces.

  1. Identifying and describing the main financial service needs for a student starting at university

    OF THE LIKELY INCOME AND EXPENDITURE AND SURPLUS OR DEFICIT SET OUT IN THE FORM OF A PERSONAL BUDGET A lot of investigating, research, planning and organising is needed to achieve the best option. Once the student has decided which university he wants to go to, he has to consider his accommodations, funding and life-style.

  2. Performance measurement and rewards within organisations.

    the bonus bank, managers can be penalized in the subsequent period by reducing some of their remaining bonus from the bonus bank. Therefore, their unpaid balances are at risk. This system ensures that managers will not try to boost short term profits at the expenses of any longer term benefits.

  1. What does Finance involve.

    -5% of �17,000 = �850.00 At the end of 25 years I will have to pay back �17,000 + �850.00 so I will have to pay back a total of �17,850 at the end of 25 years. -Therefore I will have to pay 17,850 / 25 = �714 per year

  2. Describe the following features of their two chosen businesses.

    Also economies of scale (buy lots of things) also there is an increased source of capita so it is easier to borrow money. There are also many disadvantages these include external regulation this means there are a lot of rules and restrictions.

  1. Investment Portfolio - Shares and other investments

    Flight Centre Flight Centre Flight Centre is Australia's largest listed travel agent with operations throughout Australia, New Zealand, South Africa, Hong Kong, Canada, the USA and the UK - 1500 stores all up. Flight Centre offers a full travel service focusing on holidays, tour products, car hire, accommodation and travel insurance.

  2. Free essay

    planning personal finances

    Another reason that it is important to keep financial documents is incase you may have been charged for something that you haven't even bought, you can use it as proof. Or even when you want to keep track of your money if you have financial document it is easier to calculate.

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