The Impact of Financial Accounting on Economy
There is more to Financial Accounting than meets the Eye
ACCT 201
The Impact of Financial Accounting
The current economy reinforces the necessity for businesses and organizations to maintain a strict watch over their assets. “Two-thirds of new establishments survive two years and 44 percent survive at least four years” (Knaup, 2005, p. 50). These survival rates are based across the spectrum of all industries. Despite the views that other industries survive more frequently, research shows that restaurant survival rates are slightly below the average rate. The one thing that all of these industries have in common is that their survival depends on accurate financial accounting. Financial accounting is “the area of accounting aimed at serving external users by providing them with general-purpose financial statements” (Wild, 2011, p. 5). To effectively achieve the goals of a company, financial accounting provides the foundation for the success of a company. Having educated employees is not enough, they also have to be aware and trained. Accounting teams who are aware of trends which impact the economy are essential to the survivalability of a company.
Overview
Financial accounting is the foundation of a successful business. It drives when to buy, sell, trade, how much to order, it determines when to hire, when to fire, the assets or losses for an organization. The impacts of financial accounting are far reaching. With businesses reaching global proportions and the ability to use the internet as a marketing vehicle, financial accounting is even more important to a company’s bottom line. Companies have an obligation to set a solid foundation, which means thinking beyond “credit and debits” (Porter, 2012, p. 494) which will propel companies beyond the two year point and into the future. I learned a lot of information this semester and though I try to think critically (most of the time) this course challenged me. I assimilated information that I have already begun
ACCT 201
The Impact of Financial Accounting
The current economy reinforces the necessity for businesses and organizations to maintain a strict watch over their assets. “Two-thirds of new establishments survive two years and 44 percent survive at least four years” (Knaup, 2005, p. 50). These survival rates are based across the spectrum of all industries. Despite the views that other industries survive more frequently, research shows that restaurant survival rates are slightly below the average rate. The one thing that all of these industries have in common is that their survival depends on accurate financial accounting. Financial accounting is “the area of accounting aimed at serving external users by providing them with general-purpose financial statements” (Wild, 2011, p. 5). To effectively achieve the goals of a company, financial accounting provides the foundation for the success of a company. Having educated employees is not enough, they also have to be aware and trained. Accounting teams who are aware of trends which impact the economy are essential to the survivalability of a company.
Overview
Financial accounting is the foundation of a successful business. It drives when to buy, sell, trade, how much to order, it determines when to hire, when to fire, the assets or losses for an organization. The impacts of financial accounting are far reaching. With businesses reaching global proportions and the ability to use the internet as a marketing vehicle, financial accounting is even more important to a company’s bottom line. Companies have an obligation to set a solid foundation, which means thinking beyond “credit and debits” (Porter, 2012, p. 494) which will propel companies beyond the two year point and into the future. I learned a lot of information this semester and though I try to think critically (most of the time) this course challenged me. I assimilated information that I have already begun