Accounting Basics: Financial Statements
Activity Based Costing has been adopted by many countries in different sectors around the world. , and even the government have a perfectly implemented ABC model in their management costing. The purpose of this paper is to evaluate ethics dilemma in accounting and financial decision making. One of the best methods of collecting information is carrying out research.
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Typically, business research is aimed at gaining information that is likely to make the business more successful. All types of business, whether service, manufacturing or trading, require cost accounting to track their activities. Cost accounting has long been used to help managers understand the costs of running a business. Typically, business research is aimed at gaining information that is likely to make the business more successful.
Financial accounting aims at finding out results of accounting year in the form of Profit and Loss Account and Balance Sheet Cost accounting aims at cost of productions computing (service) in a scientific manner and fascinates cost control and cost reduction. Financial accounting reports, the results and position of business to government, creditors, investors and external parties. Cost Accounting is an internal reporting system for an organization’s own management for decision making in financial accounting.
Cost classification based on the type of transaction e.g. salaries, repairs, insurance, stores etc. In cost, accounting classification is basically on the basis of functions, activities, products, process and on internal planning and control and information needs of the organisation. Financial accounting aims at presenting “true and fair”, view of transactions, profit and loss for a period and statement of financial position (Balance Sheet) on a given date. It aims at computing “True and Fair -view of the cost of production/services offered by the firm.
Cost accounting information is commonly used in financial accounting information, but its primary function is for use by managers to facilitate making decisions. Unlike the accounting systems that help in the preparation of financial reports periodically, the cost accounting systems and reports are not subject to rules and standards like the Generally Accepted Accounting Principles. As a result, there is the wide variety in the cost accounting systems of the different companies and sometimes even in different parts of the same company or organization.”
In conclusion, it would be not unreasonable to say that through business research is very crucial in the process of effective decision making. By providing ample information, both in terms of opportunities that lay ahead as well as the potential threats that exist in the market, research ensures that proper mitigation measures are taken beforehand, thereby, ensuring minimal investments, and simultaneously, it helps in the risk management process of the business.