3.1 The role of an accountant in business

  • Created by: DCN18
  • Created on: 25-10-18 15:52
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  • 3.1 The role of an accountant in business
    • The responsibilities of the accountant within the business.
      • Implementing efficiency measures
      • Formulating and implementing business policies
    • Financial accounting
      • Double entry procedures
      • Business documents:
        • Income statement
        • Statement of financial position
      • Financial accounting is essential to the recording and presentation of business activities
      • Trial balance
    • Management accounting
      • Budgeting
        • Incremental budgeting
          • Takes the figure from  the previous years budget and adds on an extra small percentage of the previous budget to amount for any rising costs that may have occurred.
            • Advantages
              • Quick and easy to prepare
            • Disadvantages
              • This method doesn't analyse why cost and revenues occur. so it would be unable to understand where costs are coming from.
        • zero based budgeting
          • This type of budgeting takes works out the budget from  "scratch" which means from the start of the year.
            • Disadvantages
              • Time consuming to create the budget.
              • Staff  would have to be trained to make sure entrues are correct.
            • Advantages
              • Every entry made into the budget has to be checked by the budget holder.
                • This means that overspending can be identified more easily
      • Marginal costing
        • The total variable costs used to produce the unit.
      • Break even
        • Break even is the point where neither a profit or a loss is made
    • Developing and overseeing accounting information systems
      • To make sure the documents are reliable, accurate and relevant.
      • The role of the accountant involves overseeing the work of bookkeepers and ledger clerk
    • The accounting equation
      • Assets- libilities= Capital

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