Business Accounting Assignment Essay

990 Words Nov 11th, 2012 4 Pages
Business Accounting
Assignment 1
Q1a)
Income Statement

Statement of Financial Position

Workings

(b) The purpose of a financial statement is to provide useful information in making major decisions in investment and lending decisions of which the major objectives includes finding out the financial position of the company, to asset the stewardship function and predictability of the company's performance and also to identify the strength and weakness of the company. Financial terms are usually referred to into two basic statements, the Income statement and the statement of Financial Position.

The Income statement also known as profit and loss statement is a financial statement that shows a
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Managers, to a manager accounting provides managers with data needed to determine whether a business is at a loss or a profit. If managers notice that the trend is for sales to decrease, then they can take measures to stop this trend. By referring to the accounting information they can decide whether they need to change prices or decrease expenses to handle the down-trend. As their performance linked bonus and wealth creation are also affected by the accounting information they are also responsible for the results of their decision made, marketing position of the company can also be monitored by the manager so as not to lose out to competitors.
(Cited http://smallbusiness.chron.com/can-managers-use-accounting-information-3950.html, 21 April 2012)

Banks, uses accounting information to speculate upon opportunity of attractive business in placements and resource attraction.
(Cited http://steconomice.uoradea.ro/anale/volume/2007/v2-finances-accounting-and-banks/83.pdf , 21 April 2012) by looking up the financial statement banks can evaluate whether a company has

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