Understanding the purpose of accounting


Recording Transactions

This can be defined as where all the money has been recorded down when it has entered and left the business where it ensures payments are being received and bills have been paid. It looks into the assets down below:

- Accounts Payable: Where the accounting software has been used to enter the implication of invoices which have been received by suppliers of a business organisation.

- Check Writing: When the accounting software has been used to write down the checks and then had been credited as cash accounts.

- Payroll: This has been processed in by most compnaies made into accounting software which is used to process the procedure.

- Sales on Credit: This is used to prepare the sales invoices for a customer that has purchased on credit where the details of the customer have been updated.

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Management of the business

This can be defined as the process of effective planning which has been made, the budgets which have been monitored and the cash flow with the additional use of the finance which has been controlled. There are several different resources types that have been shown in management which can be shown as the following down below:

- Human resources

- Financial resources

- Technological resources

- Natural resources

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This can be defined as what comes into complying with legal obligations in financial reporting and internal accounting helping to combat against fraud. There are important factors that relate to compliance and these can be stated as the following down below:

- Compliance demand grows with your business

- Reduces legal problems

- Improved operations and safety

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Measuring Performance

This can be shown as the measurement of the growth that has been made into gross and also the additional use of net profits. The sales revenue and also the level of efficency can be shown as the collection to money which has been made and also the expenditure and costs in addition. A few factors can relate to this and can be stated down below:

- Measuring your financial performance

- Measurement with the business and the customers

- Measurement made in the business and employees

- Benchmarking the business's performance

- Competitor analysis

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This can be shown as the control which has been made when it comes to track down receivables and this beginning to control the track of payables brought into the business organisation. The implication of control also links into assisting the prevention of fraud and the access that links into the key systems to be unlocked. It can be shown in different forms of implication which can be stated down below:

- Organizational Controls

- Financial Controls

- Process Controls

- Implementing Controls 

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Finance Manager

This can be shown as a role made for year end close process and then has been prepared for the use of annual assets of tax files and to be made first part of the contact made into auditors and tax auditors where this comes into the management of the budgets and preparations which are to look into foreign impact and this relating to the tax auditors. There are other additonal uses as well which can be stated as the following down below:

- Overseeing the flow of cash and financial instruments

- Planning and directing the activities of workers in the branches or departments

- Preparing reports as required by law, regulations or company policies

- Ensuring compliance with applicable laws and procedures

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These can be stated as assets which can be examined as the following down below:

- Accountancy & Finance

- Business

- Economics


- Mathematics

- Statistics

- Institute of Financial Accountants

- Associations of Chartered Certified Accountants 

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Different types of insurance

The uses of different types of insurance cna be shown as the following down below:

- Loans

- Tax

- Profit

- Money is obtained from shares

- Investments

- Subsidies

- Sponsor

- Revenue

- Sales

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