The Role of Accounting in Business and Our Society
Accounting increases a student's preparedness to understand complex business concepts and the rationale managers use to make financing decisions. It is a business discipline that allows companies to analyze, record, and retrieve critical financial information that can be used to determine a company's financial status, and provide reports and insights that are needed to make sound financial decisions. Use the Internet or the Strayer Online database to research relevant accounting information to respond to the questions in the assignment. Write a two to three (2-3) page paper in which you: Describe the purpose of each financial statement. Determine which one (1) is the most effective in communicating the financial health of an organization. Defend your position. Compare the major functions of an accountant to that of a certified public accountant. Make an argument for and against the importance of accounting and accountants in our society from a U.S. or global perspective. Imagine that you have decided to create your own business venture. Determine whether the company will be a service or merchandising company. Describe the differences between the charts of accounts for both companies. Based on the company that you selected in 3, make an argument for automating the accounting process, and implement at least three (3) types of internal controls to prevent or detect theft or fraud. Your assignment must follow these formatting requirements: Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions. Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
Accounting
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To capture the finical information within any firm, there are four types of financial statement that are crucial to the running of the business. A balance sheet is one of them and its main purpose is to give the financial position at a specific time of a business with reference to the assets, liabilities and equity for the shareholders. As such, it can be said to the quick snap shot of the firm’s financial position at specific time. The second financial statement is the income statement. This is a document that indicates the performance of the firm with reference to the income and the expenses. As such, it shows if the firm is making a loss or a profit by basically subtracting expenses from income. The third is the cash flow statement which indicates the cash movement and the balances at the bank within a specific period of time with reference to the financing activities, operating activities and the investing activities. The final statement is referred to as the statement of changes in equity or the statement of retained earnings. It indicates how the owner’s equity has moved over a given time period. The balance sheet is the ultimate statement as summarizes all the financial undertakings of the firm into a simple and very powerful indication of the business position and the basic health.
While the accountant takes care of the financial records in a firm given that they have the knowledge of how the different elements affect the business, they can never do the work of a certified public accountant (CPA). The CPA can offer financial advice, represent clients in the IRS cases, conduct financial audits as well certifying financial statements, which an accountant cannot. This mostly due to the fact that a CPA is more academically qualified and regulated by the state, therefore holds more mandate and responsibilities that a normal accountant (Accounting Simplified, 2014).
Majority of the decisions that are made in any of the boardrooms, almost always have to do with some financial aspect of the business. This means that finances are at the core of any business entity. Making financial decision requires in-depth knowledge of the various elements of the financials spheres and legal implications, which can only be done with the help of a certified accountant. As such, from the simple aspects of ke...