Make your own free website on Tripod.com

Guide on How to Write University Essays, Courseworks, Assignments and Dissertations

Need for Financial Accounting in a Business Entity

Home
Articles Library
Medicine, Psychology and Sociology Articles
Business Articles
Economics Articles
Industry Lifecycle
Marketing Mix
McKinsey 7S Framework
Product Life Cycle
Ansoff Analysis
BCG Growth-Share Matrix
Value Chain
Porter's Generic Strategies
Scenario Planning
PEST analysis
SWOT Analysis
Porter's 5 Forces analysis
Sitemap
Comments about this web site
Favorite Links
How to write an Essay
How to Write the Coursework or Report
How to write the Marketing or Marketing Communications Campaign
How to write the Dissertation
Where to start?
How to choose an area of research
How to define Issue or Argument
How to define Issue or Argument
How and where to review the literature
Research Methods
Dissertation Structure
Some tips to survive your dissertation: some predictable crisis
Important tips to succeed the dissertation
Databases of Academic Journals and Publications; Market Data
Essay Sites
Student Tricks
Exam Preparation Tips
Company-Based Reports
BALANCED SCORECARD
Critical Success Factors
Competitor Analysis
Review

Financial accounting refers to the recording of the financial transactions of the business which includes the company's every day transactions. Financial accounting is very important in reviewing the business results periodically. They are very helpful in finding out whether the business is getting the owner profits or loss. The business owner decides the future course of action based on the results of the financial accounting (Russels nd). Financial accounting can be carried out for depreciation also.

 

FINANCIAL ACCOUNTING INVOLVES:

 

Financial accounting is related to the accountancy which is mostly involved with the research of economic report for all of the conclusion creators (Porter and Norton 2000). They include mostly stock holders. The basic requirement for financial accounting is to moderate chief and major representative issues by determining and monitoring all of their presentation and thereby, exhibiting the report to the entire concerned person. Financial accounting process includes two types of transactions.

 

• Analyzing transactions

• Recording transactions

 

ROLE OF FINANCIAL ACCOUNTING:

 

Financial accounting generates some of the key documents which includes, profit and loss account showing the method of business traded for a specific period and also the Balance sheet which provides a statement showing mode of trade in business for a specific period.

• Role includes recording financial transactions thereby collecting money from all sales, wages, etc.

• Helping the managers in business to manage more efficiently by means of preparing standard financial information which includes monthly management report presenting the costs and profits against budgets, sales and investigations of the cost.

 

PRINCIPLES OF FINANCIAL ACCOUNTING:

 

Financial accounting is based on several principles. These are called as Generally Accepted Accounting Principles (GAAP) (Williamson 2007). These include the Business Entity Principle, the Objectivity Principle, the Cost Principle, and the Going-Concern Principle.

 

• The Business Entity Principle states that, every business requires to be accounted for separately from the proprietor. Personal and business-related dealings should not be varied.

• The Objectivity Principle states that, the information contained in financial statements requires being objective and not based on opinion.

• The Cost Principle refers that, the information contained in financial statements requires to be based on costs incurred in business transactions.

• The Going-Concern Principle states that the business will continue operating and will not close or be used.

 

IMPORTANCE OF FINANCIAL ACCOUNTING:

 

• It provides stakeholders legal information such as financial accounts in        trading account and balance sheet

• It shows the mode of investment for shareholders

• It provides business trade credit for suppliers

• It notifies the risks of loan in business for Banks and lenders

 

BENEFITS OF FINANCIAL ACCOUNTING:

 

Financial accounting is useful in producing financial statements for all purposes, and also specifying the information of a business unit production for selection and also for performance opinion.

 

LIMITATIONS OF FINANCIAL ACCOUNTING

 

One of the major limitation of Financial accounting is that it doesn’t take into account the non monetary facts of the business like the competition in the market, changes in the value for money etc. another limitation of financial accounting is that it offers you an overall report rather than a product wise report in the business.

 

References:

 

‘Financial accounting’ by Gary A. Porter and Curtis L. Norton.

 

‘Financial accounting concepts’ by Duncan Williamson

 

'Accounting-Three major areas’ by Michael Russels

 

www.allbusiness.com [online source]

 

www.wikipedia.com [online source]

C/F/221. Bellway Plc: financial performance and the changes in the accounting standards

C/F/217. What aspects of financial crime are you concerned about and how do you think we should educate future business leaders in regard to financial crime

C/F/211. Accounting of Fixed Assets

C/F/208. Budget Planning: Airline Industry and British Airways

C/F/207. Compare between the ASB statement of principles and IASB framework, discuss the conflicts between UK and international principles

C/F/206. IFRS: Problems and Issues with Adoption

C/F/205. Are the accounting regulations for the intangible assets appropriate? The case of FRS10, ASB 1997a, IAS 38, IASB 2004, SFAS 142, FASB 2001

C/F/188. Historical development of accounting regulatory framework in Spain - Critical analysis of the present position, discussing possible causes such as culture, source of finance, legal system, the profession and taxation

C/F/185. UK Statement of Principles (SOP)

S/F/112. Development of a single set of accounting standards in Europe 1970-2005 and the process of the IASB, with the FASB of accepting a globally recognised conceptual framework

E/F/88. ETHICS IN ACCOUNTING: SOCIAL RESPONSIBILITY

E/F/87. ACCOUNTING FRAUDS

E/F/85. Accounting Scandals: Xerox Inc Vs Skyworth Digital Holdings

S/F/95. Financial evaluation of project

S/C/41. REVIEW AND ANALYSIS OF THE MORSK GROUP ACCOUNTING & FINANCE INFORMATION SYSTEMS

E/F/78. Financial Statement and Reporting Analysis of Thorntons Plc

E/F/76. Corporate fraud: how can it be prevented?

E/F/68. Report on Robinson and Company Ltd

E/F/66. Creative accounting: lessons of Enron scandal

E/F/63. ADVANCED FINANCIAL ACCOUNTING: Evaluation of Cash Flow Accounting

E/F/62. Management and Cost Accounting: budgeting

E/F/59. Advance Corporate Reporting module: IASB and FASB Convergent Project

S/F/120. Business valuation

S/F/98. Financial Accounting Report

S/F/92. Creative and fraudulent accounting

P/F/519. International accounting standards and US GAAP

P/F/517. Valuation of financial statements information

S/F/89. Break Even Analysis

C/F/141. Adoption of International Accounting Standards: Case of UK

E/F/43. Audit: theoretical and legislative framework

P/F/504. Legal actions against auditors

E/F/41. Rule-based and Principle-based approaches to accounting standards

E/F/40. Theoretical foundations and standards of audit

P/F/495. Deviation from standard accounting practises: creative accounting

E/F/39. Use of accounting information in management

P/F/492. Cultural issues of International accounting standards

P/F/488. Mitchells & Butlers: issues of financial accounting

P/F/523. Problems of accounting in UK public sector

P/F/475. Accounting errors in refining a costing system

P/F/463. WorldCom fraud: history, analysis, solutions

C/F/133. REPORT ON ASSESSMENT OF COSTING APPROACH – ROBERT PLC

S/F/72. The accounting process and accounting for intangibles

P/F/428. Depreciation method in financial reporting

C/F/121. Financial Accounting: The Enron case

E/F/30. Adherence to accounting concepts in financial statements

E/F/27. Standards in accounting for brands

E/F/26. Financial reporting: issues of reliability

P/F/387. Asymmetry of earnings and principle of conservatism

E/F/24. FRAUDULENT AND CREATIVE ACCOUNTING, THE ROLE OF AUDITORS AND ACCOUNTING STANDARDS, IN THE QUEST FOR PRESENTING A TRUE AND FAIR VIEW

P/F/382. Dissertation. Money laundering

E/F/23. Desirability of harmonization in accounting standards

P/F/369. Techniques for analyzing accounting information

P/E/298. The role of Tobin tax in stabilizing global financial system

E/F/18. Ethical guidance over auditors

P/F/363. Goodwill in financial accounting

C/F/109. Performance measurement and accountability in commercial and public sectors

C/F/108. Environmental and social reports in the accounting profession: do they matter and can they influence corporations to be more accountable for their actions?

E/F/15. Regulatory Framework of Accounting: GRUMPY Ltd

P/F/336. Financial reports and their functions

P/F/320. Who are financial statements addressed to?

P/F/319. International accounting standards: pros and contras

C/F/101. Harmonization process of international accounting

P/F/299. Disclosures in annual reporting

C/F/100. Expectation gap: are the standards too low in auditing profession or are the publics expectations too high?

S/F/47. Is it Possible to Adopt Universal Global Accounting Standards?

P/F/289. Inflation accounting and efficient market hypothesis

P/F/286. International Accounting Standards in developing countries

P/F/267. Problems of Financial Reporting

P/F/241. Issues of financial accounting

P/F/230. Fraudulent practices in accounting: report on recent scandals

C/F/59. EU and International Accounting Standards

P/F/218. Germany Accounting System

P/F/216. Cash management

C/F/58. Financial statements: importance of accounting policies and measures for prevent aggressive §window dressingė

P/F/203. Transaction Costs

P/F/205. IAS 39: Recognition and Measurement of Financial Instruments

P/F/191. Why Financial Measures Alone (such as budgets) May be Insufficient?

P/F/189. Dissertation. Impact of Language and Culture differences on International FRS Interpretation

P/F/184. Enron Collapse: Implications on Regulations

P/F/165. Tobin's Tax

P/F/161. Tangible Assets

P/F/164. Brand and Financial Accounting

P/F/134. "Creative Accounting"

P/F/143. Creative Accounting and the Problems it creates

C/F/175. Discuss, with illustrations, the problems that may arise in collecting and interpreting relevant financial data from the financial statements of foreign multinational competitors

P/F/312. Accounting in Britain and New Zealand: history, present and future

S/F/13. Short Term Decision Making - Contribution Margin and Break-Even Analysis

GR/F/13. Need for International Accounting Standards and Main Differences between them and UK GAAP

P/F/13. Quantitative financial accounting. How, and why, should - and are - financial services regulated in the UK?

P/F/28. Managerial accounting.

C/F/17. Calculate the financial ratios of Marks and Spencer for 2002 and 2001. Compare them

C/F/18. Analyse the following areas of managerial accounting with examples: Absorption Costing and Variable Costing, Breakeven analysis, Standard costs and variance analysis, Budgeting.

C/F/26 Investigation of the Financial Performance of the Cadbury Schweppes PLC from 20.02.2003 to 01.05.2003for the Investment Purpose

C/F/30. Comparison of the financial performance of the EasyJet and RyanAir companies for investment purposes

P/F/57 Financial analysis of Burswood Ltd

P/F/59 Making Decisions

P/F/66. Financial analysis of Tesco plc and Allied Domecq plc

D/F/10. Financial analysis of BT operations - cost management perspective

P/F/75 The Principals of Accounting

Enter supporting content here