Operational rules for financial management, Financial Management

Operational Rules for Financial Management

Besides features, certain operational rules are established as to the subsequent:

1) While revenue and expenses are reported;

2) How expenses are matched to revenue;

3) What to do whenever a choice could be made that might overstate or understate figures; and

4) What type of information should be disclosed so that the reader will fully understand the circumstances under which the information is being presented?

5) There are also basic assumptions upon which the reader could rely, such as:

6) The information is associated to the business entity only and doesn't have any unrelated information mixed in,

7) The business is a going concern & won't cease operations soon;

8) The financial information presented is measured in exact time intervals such as a month, quarter or year. The financial information is using a certain unit of measure such as Dollars, Rupees, Pound, etc.

9) The particular information is presented at historical cost, i.e., while received, paid, or incurred; and

10) The technique of accounting being used is double-entry and not some other method.

One of the basic reasons of accounting is to give financial information about a business enterprise to several users of accounting information for decision making purpose.The user of accounting information widely uses the information for the purpose of assessing profitability, financial position and actual performance, investment decisions credit, assessing taxes, decision, protecting investors and public interest, setting economic policies, measuring social & environmental protection programmes and negotiating labour agreements.

Posted Date: 2/6/2013 12:45:49 AM | Location : United States







Related Discussions:- Operational rules for financial management, Assignment Help, Ask Question on Operational rules for financial management, Get Answer, Expert's Help, Operational rules for financial management Discussions

Write discussion on Operational rules for financial management
Your posts are moderated
Related Questions
Nominal spread of a non-treasury bond can be defined as the difference between the bond's yield and the yield to maturity of a benchmark treasury coupon security.

Market based Ratio's   PE:           The Price-to-Earnings ratio is calculated by market price per share to earnings per share and is expressed in terms of times. It shows h

Contractual savings institutions Contractual savings institutions obtain funds at periodic intervals on a contractual basis. The industry is classified into two main groups ins

Q. Determine Cost of redeemable Debt? Cost of redeemable Debt: - Usually a company issues a debt which is redeemable subsequent to a certain period during its life-time. Such a

At the end of 1922, your great grandfather (g.g.f.) established a trust fund to be used in order to help a later generation of the family obtain a university education. The ultimat

Active bond management depends on an economic scenario in order to forecast the movements of yield curve. A portfolio manager skillfully builds a portfolio wit

1.  Discuss the various techniques of cash management for an efficient working capital Management. 2.  Discuss the MM Hypothesis of Capital structure and its importance in corpo

Accounting Entity - Accounting Principle For accounting reasons it is suppose that business has separate existence and its entity is different from that of its owner(s). In si

Solutions to this Conflict In common, to make sure that managers act to the best interest of shareholders, the firm will: (a) Acquire Agency Costs in the form of:

Q. Define Working Capital. Ans. Introduction: - Working capital plays the similar role in the business as the role of heart in the human body. Just like heart gets blood as well