Accounting & Business Resolution

Accounting & Business Resolution

Unit III

Explain to your staff at least 2 ways in which accounting data are used to make business decisions?

The chief financial officer is a corporate executive having the financial authority to make appropriations and authorize expenditures for this company and to determinate the best course of action.

The main objective of accounting department in this company is to put into effect a methodical procedure to report, record, and analysis of all financial transactions. This data obtain is analyze to the current financial performance such as (statistical analysis and financial ratios) and at the same time provides a record where historical trends along with current market conditions can be analyzed for future budgeting purposes.

 Accounting data is used by internal and external parties to make business decisions.

 To identify trends in both sales volume and product profitability.

 Accounting data is also used as a means of controlling expense.

Explain at least three related accounting terms or theories.

Net sales are equal to revenue minus return and discounts. It refers to the value of the business, sales of the goods and (services to its costumers) Investor pay close attention to the net income statements of a company

Budgeting is the process of calculate the expected income and expenses for a future period. The starting point in budgeting process is by collecting information on historical sources of income such as expenses including any equipment purchases. And them comparing them against the achievement of the main objective of the business

Accrual Basis is an accounting method that measures the performance and position of a company by recognizing economic events regardless of when cash transactions occur. The main idea behind this is that you match revenues to expenses at the time the transaction occurs rather than when payment is received.

Current Assets and Liabilities

Current Assets represent the value of all assets that are reasonably expected to be converted to cash within one year in the normal course of business.

Current Liabilities are obligation or debts that are due within one year