Accounting, Financial Management

Accounting:

Many people believe financial management only relates to bookkeeping and the establishment of accounting reports which reflect those transactions in the books.  While accounting is certainly a major part of an organisation's financial management framework, accounting is mainly viewed as a method of recording.

Accounting is the process of identifying, measuring and communicating financial information. 

Broken down, these elements can be explained as follows:

  • Identifying: Accounting identifies transactions within the organisation. The transactions are the key. Every source of revenue (commissions in) should be recorded, as should every expense (salary payment, advertising costs, parking reimbursement).
  • Measuring: Accounting takes the raw data captured through the identification process (the records of the transactions) and converts it into information. This conversion process classifies the raw data into logical groupings such as dividing expenses into logical areas (wages, stationery, utilities).
  • Communicating: Using the information derived through the identification and measurement process, accounting reports then communicates that information to the interested parties

Accounting can be divided into many areas, however for the purposes of this module we will focus on two major subsets of accounting, namely Financial Accounting and Management Accounting.

Posted Date: 10/1/2012 3:55:52 AM | Location : United States







Related Discussions:- Accounting, Assignment Help, Ask Question on Accounting, Get Answer, Expert's Help, Accounting Discussions

Write discussion on Accounting
Your posts are moderated
Related Questions
Discuss any advantages you can think of for a company to (1) cross-list its equity shares on much more than one national exchange, (2) To source new equity capital fro

What is the correlation between the efficient portfolio and the risk-free asset? Possible answers are +1, -1, 0, or cannot be calculated.

Different Cost of Capital with Changed Proportions: It is quite possible that the specific costs of capital of different sources may be affected by the amount of funds' raised and

Q. Accounting Change? Accounting Change - Change in (1) an accounting principle (2) an accounting estimate or (3)the reporting entity which necessitates DISCLOSURE and explan

Rating denote an issuer's ability to respond to adverse changes in circumstances and economic conditions. The rating scale is generally differentiated into variou

Q. What is Purchasing Power Risk? Variations in the returns are caused also by the loss of purchasing power of currency. Inflation is the reason behind the loss of purchasing p

Introduction of Financial Management Accounting has evolved and emerged within response to the social and economic needs of the society. The procedure of book keeping (mainten

Enron did not manages its trade account receivable in significant manner that made huge financial loss for the organizations. Hence, the management faced biggest fraud due to the f

Q. Explain Profit Maximization Approach? (i) Best Criterion on Decision-Making:- The goal of revenue maximization is regarded as the best criterion of decision-making as it off

Scope of Financial Management The approach to scope and functions of financial management is divided, forpurposes of exposition, into two broad categories: (a) Traditional A