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
I just purchased a stock that would pay the dividends of the first four years as D1 = $0.65, D2 = $0.74, D3 = $0.79, D4 = $0.84. I also told that the dividends would grow continual

In this exercise you will construct efficient portfolios with 5 risky assets using Excel's non-linear optimization routing "Solver". The questions are designed to be sequential and

How do we estimate expected incremental cash flows for a proposed capital budgeting project? We valuate expected incremental cash flows for a proposed project by valuating the

Market Value Ratios Price-Earnings Ratio P/E ratio shows how much investors are willing to pay for earnings per share of the company. Market-to-Bo

discuss the applicability of operating cycles of vegetable growing

Lease A lease is a contractual arrangement allowing one party the use of some exact assets for a specific times period in exchange for a payment it is same as a rental arrangem

QUESTION (a) "A promissory note is an instrument in writing (not being a blank or a currency note) containing an unconditional undertaking, signed by the maker, to pay a certai

Factors Affecting cost of capital are elements in the business environment that cause a company cost of capital to be high and low. Figure below illustrative the various primary fa

Evaluate the extent to which the Balanced Scorecard: The Balanced Scorecard has been described as an effective measurement system which enables managers of an organisation to

Explain the risk–return relationship The relationship among the risk and required rate of return is termed as the risk–return relationship.  It is a positive relationship since t