Sub: Accounting Topic: Aspects of accounting
The Homework solutions from Classof1 are intended to help students understand the approach to solving the problem and not forsubmitting the same in lieu of their academic submissions for grades.
accounting systems supply a means of recording data so as to enable the production of reports or for use in calculations. Like for the preparation of financial statements.
accounting systems assist in categorising data so as to enable the production of reports or for use in calculations. Like, identifying whether an item is an asset or an expense, orwhich costs should be included in inventory.
accounting systems quantify data so as to enable the production of reports or for usein calculations. Like, determining how much profit a business has earned in a year.
accounting systems provide information which enables owners to determine howfunds entrusted to managers have been used by them, and to what ends.
Information for decisions:
accounting systems provide information which enables users to makedecisions about the future. Like, to assist investors or managers in deciding how to allocate theirlimited resources.
Monitoring and control:
accounting systems provide information which enables management tomonitor performance, and take corrective action if necessary.
Performance evaluation and compensation:
accounting systems provide information on theperformance of different individuals and parts of the business in order to determine how muchmanagers and employees should be rewarded, according to the terms of their contracts.