Modern Accounting - Modern Accounting Kenroy Fletcher ACC...

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Modern Accounting Kenroy Fletcher ACC 205 Brent Beyer August 24, 2009 Modern Accounting Like me, most people dream of running their own business someday. Some of the common questions that we ask ourselves are; where do I begin? How much money do I have to spend? Or how will I measure success or failure? Whenever you are talking about managing your own business, you will need to know how to keep a successful accounting record. “Accounting is the information system that measures business activity, processes the data into reports, and
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communicates the results to decision makers. Accounting is “the language of business.” The better you understand the language, the better you can manage the business (Horngren & Harrison, accounting, 7 th ed, 2007, p. 4).” Accounting information is important for every business owners; they use this information to set goals for their company. Some of the key important things that one should know when starting a new business are: the importance of modern accounting system and the difference it made in modern organizations, the importance of accurate financial statements for outside business interest, different ways depreciation accounting help the firm manage equipment investment cost and taxes, different ways stock price and dividends reflects the value of the firm, and cash vs. accruals: is the a difference in recognizing transactions. Modern accounting system makes a big difference in modern organizations. “The basic tool of accounting is the accounting equation. It measures the resources of a business and the th ed, 2007, p. 11).” These tools are assets, liabilities and owner’s equity, or capital. Accounting is based on actual transactions, not opinions or desires. All transactions will be recorded on a financial statement. The financial statements are business documents that report on a business in monetary terms. The financial statements summarize the transaction data into a form that’s useful for decision making. The financial statements are the: Income statement, statement of owner’s equity, balance sheet, and the statement of cash flow. All organizations have to make decisions on a day to day basis as well make decisions regarding the future and how to survive and grow in a dynamic market place with ever increasing uncertain circumstances. Traditional or modern accounting system provides relevant information to all levels of management, financial and other information to make decisions regarding planning, control of operations and identifying opportunities to add value. In
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essence, modern accounting is an important factor, which gives internal managers sufficient and relevant information in time and set targets, monitor performance and systematically improve the efficiency and effectiveness of the organization in meeting its objectives consistently, as well adds value by creating operations and processes within the organization. The modern accounting
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Modern Accounting - Modern Accounting Kenroy Fletcher ACC...

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