Accounting Essay -- Business Management Studies

method of accounting Accounting is the practice of maintaining, auditing and processingfiscal information (http//en.wikipedia.org/wiki/Accounting) forthe purpose of a company, somebodys or organisation. There ar somefundamental parts of accounting which are Identifying, measuring andcommunicating (Black, 2000). You need to identify the importantfinancial sections of a company, person or organisation which willinclude the companies assets, liabilities, capital, income and ofcourse expenditure. You will also need to measure monetary valuesof the key financial components in a way which represents a true andfair view of the organisation (Black, 2000). Finally there is thecommunication side of accounting, it is vital that a company, personor organisation can communicate all of the financial informationgathered so in turn users, whether they are internal or external,will be able to receive the correct financial information and be ablefollow it. There are two forms of accounting they are FinancialAccounting and Management Accounting. Financial Accounting isconcerned with the preparation of financial accounts for the benefitof people outside a company or organisation. Management Accounting isfinancial information used by managers within a company ororganisation to make financial decisions based on the information thatthe accounts provide.There are many people who would be interested in companys accounts,they are divided up into two groups orthogonal Users and Internal Users. Within the External Users group are Investors, lenders, Suppliers,Customers, prospective buyers, other businesses and the Government. Included in the Internal Users group are the Owners, Shareholders, theBoard of Directors and Employ... ...ountsPayable which are debts owed BY a company, person or organisationswhich, at present have not been paid, Capital, Income and finallyRevenue and as before if there was a increase in any of the in a higher place itwould be a Debit portal.For example if a company, person or organisation was to purchase afixed asset such as a building or piece of machinery this would be anincrease in that company, person or organisations assets and wouldtherefore be a Debit entry, the other side of the entry would be aCredit entry as there would be a decrease in the bank account of thecompany, person or organisation. The restate Entry Bookkeeping isessential in order for a company, person or organisation to keep trackof all financial transaction as range of a function Entry is a very detailedfinancial account and everything that comes in or out of the businessis written in a Double Entry Account.