the role accounting and financial information plays for a business and for its stakeholders. I. THE ROLE OF ACCOUNTING INFORMATION A. Financial information is the HEARTBEAT OF COMPETITIVE BUSINESS MANAGEMENT. 1. You have to know something about accounting if you want to understand business. 2. You need to learn basic accounting terms and understand basics of how accounts are kept. 3. To run a business effectively you need to be able to read‚ understand‚ and analyze accounting reports
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Accrual Method Nonprofit organizations are required to produce financial statements based on the accrual method of accounting. How is this different from the cash basis of accounting? With accrual accounting it is easy to recognize when revenues are earned and expenses are incurred. Under the cash accounting method an non profit agency would not have any revenues because everything is recorded on a cash in and cash out transactions under cash accounting. There is never any
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Concepts of Throughput Accounting In 1890s when cost accounting was introduced‚ labour was the greatest fraction of manufactured cost and considered as a variable cost. Very often workers did not know about the actual time of hours that they have to perform in a week when they reported for duty since the systems of time-keeping were undeveloped. Here comes the importance of throughput accounting which removes the dependence of standard cost accounting on efficiencies‚ particularly the
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Accounts basic concept with tally Accounting: It is an art of recording‚ classifying and summarizing in significant manner and in terms of money‚ transactions and events which are of financial character and interpreting the results thereof. Business transaction: A business transaction is “The movement of money and money’s worth form one person to another”. Or exchange of values between two parties is also known as “Business Transaction”. Purchase: A purchase means goods purchased by a businessman
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Basic Accounting Principles and Concepts http://misscpa.com/basic-accounting-principles-and-concepts/ Accounting is called the language of business that which communicates the financial condition and performance of a business to interested users‚ also referred to as stakeholders. In order to become effective in carrying out the accounting procedure‚ as well as in communicating the financial information of the business‚ there is a widely accepted set of rules‚ concepts and principles that
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Accrual Method Accrual accounting is more accurate on the “timing” of reported revenue and expenses. In cash basis accounting for instance‚ when you have shipped out the goods out of your warehouse to the customer and they have receipt‚ but haven’t received the cash‚ you didn’t book the revenue. However‚ when it comes to Accrual‚ providing you satisfy the revenue recognition principles‚ you can already book the revenue. In accrual accounting you have non-cash items on the books for a particular
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The role of accounting The role of accounting in business is to help interested parties (internal and external) to make business decisions. LEARNING OBJECTIVE Explain how the accounting process aids in the making of business decisions KEY POINTS Financial accounting generates some of the key documents‚ including profit and loss account showing the method of business traded for a specific period and the balance sheet which provides a statement showing mode of trade in business for a specific
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assignment‚ I will discuss why I think Shop Rite grocery store use the accrual based accounting method rather than cash based accounting. Here are some facts about grocery stores that contributed to my decision to choose a shop rite supermarket store as my example. Shop Rite a (co-op) super markets has many stores in the Northeastern United States. Let’s look at some facts about Grocery stores‚ and why I think they use accrual based accounting. Just the sheer size of Shop Rite grocery stores coupled with
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ACCRUAL SWAPS AND RANGE NOTES PATRICK S. HAGAN BLOOMBERG LP 499 PARK AVENUE NEW YORK‚ NY 10022 PHAGAN1@BLOOMBERG.NET 212-893-4231 Abstract. Here we present the standard methodology for pricing accrual swaps‚ range notes‚ and callable accrual swaps and range notes. Key words. range notes‚ time swaps‚ accrual notes 1. Introduction. 1.1. Notation. In our notation today is always t = 0‚ and (1.1a) D(T ) = today’s discount factor for maturity T. For any date t in the future‚ let Z(t; T ) be the
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TOPIC 1: ACCOUNTING BASES‚ POLICIES‚ AND CONCEPTS ACCOUNTING BASES - These are the methods used for applying fundamental accounting concepts to financial transactions and items‚ preparing financial accounts‚ determining the accounting periods in which revenue and costs should be recognized in the profit and loss account‚ and determining the amounts at which material items should be stated in the balance sheet. - Examples of accounting bases include: Methods of calculating depreciation Methods
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