THE ROLES OF ACCOUNTING ON BUSINESS AND OUR SOCIETY
THE ROLES OF ACCOUNTING ON BUSINESS AND OUR SOCIETY
By
QUINISIA HILL-WILSON
MARCH 4, 2014
ACC 100
MR. TIMOTHY CARR
STRAYER UNIVERSITY
WINTER 2014
1. Describe the purpose of each financial statement. Determine which one (1) is the most effective in communicating the financial health of an organization. Defend your position.
Income Statement presents revenues and expenses and resulting net income or net loss for a specific time period.
Owner’s Equity Statement is a summary of the changes in the owner’s equity for a period of time.
Balance Sheet reports all assets, liabilities and owner’s equity at a specific date.
Statement of Cash Flows is a summary of information about cash inflows (receipts) and outflows (payments) for a specific time period.
In my opinion the statement of cash flows is the most effective in communicating the health of an organization. It lists all of the money that comes in and out of the business to keep it running, from revenue to net profit/ loss. Most people who would consider investing in a business would like to see this statement. In the event I was in the market for investing in an organization or business, I would want to see all of the previously stated financial statements. In order to make a wise decision as to whether it would prove to be worth my time and money. Though some businesses have been known to “cook” the books to look profitable, it helps to be knowledgeable about the different financial statements and their purpose.
2. Compare major functions of an accountant to that of a certified public accountant. Make an argument for and against the importance of accounting in our society from a U.S or global perspective. Both CPAs and accountants share similar roles of making sure financial records are in order. They both collect and organize financial data. An accountant works with bookkeepers, which handle daily financial transactions and entries made to the general ledger and review
By
QUINISIA HILL-WILSON
MARCH 4, 2014
ACC 100
MR. TIMOTHY CARR
STRAYER UNIVERSITY
WINTER 2014
1. Describe the purpose of each financial statement. Determine which one (1) is the most effective in communicating the financial health of an organization. Defend your position.
Income Statement presents revenues and expenses and resulting net income or net loss for a specific time period.
Owner’s Equity Statement is a summary of the changes in the owner’s equity for a period of time.
Balance Sheet reports all assets, liabilities and owner’s equity at a specific date.
Statement of Cash Flows is a summary of information about cash inflows (receipts) and outflows (payments) for a specific time period.
In my opinion the statement of cash flows is the most effective in communicating the health of an organization. It lists all of the money that comes in and out of the business to keep it running, from revenue to net profit/ loss. Most people who would consider investing in a business would like to see this statement. In the event I was in the market for investing in an organization or business, I would want to see all of the previously stated financial statements. In order to make a wise decision as to whether it would prove to be worth my time and money. Though some businesses have been known to “cook” the books to look profitable, it helps to be knowledgeable about the different financial statements and their purpose.
2. Compare major functions of an accountant to that of a certified public accountant. Make an argument for and against the importance of accounting in our society from a U.S or global perspective. Both CPAs and accountants share similar roles of making sure financial records are in order. They both collect and organize financial data. An accountant works with bookkeepers, which handle daily financial transactions and entries made to the general ledger and review
References: Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2014-15 Edition, Bookkeeping, Accounting, and Auditing Clerks, on the Internet at http://www.bls.gov/ooh/office-and-administrative-support/bookkeeping-accounting-and-auditing-clerks.htm (visited March 04, 2014). Similarities and Differences Between Accounting and Bookkeeping by Kate Bluest http://smallbusiness.chron.com/similarities-differences-between-accounting-bookkeeping-59002.html Accountant Jobs Descriptions http://hiring.monster.com/hr/hr-best-practices/recruiting-hiring-advice/job-descriptions Accounting Principles Volume 1, 11th Edition 2013, Jerry J. Weygandt PhD, CPA; Paul D. Kimmel PhD, CPA; Donald E. Keiso PhD, CPA