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
Illustrate the meaning of Gearing Gearing is the relationship between equity anddebt. Debt is typically long term liabilities that the organisation has. Equity is all the shar

What does it mean when we say that the correlation coefficient for two variables is -1? What does it mean if this value were zero? What does it mean if it were +1? Correlation is

Eurobond A corporate bond denominated in U.S. dollars or other hard currencies and sold to investors outside the country whose currency is used. Eurobonds have become an impor

explain the concept of working capital management?

Compare and contrast the potential liability of owners of proprietorships, partnerships (general partners), and corporations. The sole proprietor has infinite liability for mat

For capital budgeting decision which cost is relevant For capital budgeting decision, composite cost of capital is comparatively more relevant albeit the firm may finance one p

Determine the Valuing Equity Securities Unlike debt and money market instruments, equity instruments represent ownership interest in the company. As owners should put in their

1.   Discuss the various techniques of inventory management for efficient working capital management. 2.   Discuss the importance of dividend decisions. What is MM theory of div


Meaning merits nd demerits of modern approch of financial management