Overview of Accounting
By Investors term, accounting is a structural system of recording, reporting and analyzing all the financial transactions of one company or an organization (InvestorWord, 2008). In general, accounting summarizes all the financial activities and data through “income statements, balance sheets, and the statements of cash flows” (Block & Hirt, 2005). The purpose of this paper is to provide the basic information on accounting and finance to the small businesses owners with no accounting or finance knowledge. By providing and presenting the basic concepts of accounting and finance, these small companies will be able to understand the relationships between accounting and finance as well as to apply these two concepts to their own organizations. The financial managers not should understand the relationships of economics, accounting, and finance in order to manage and control all the financial activities successfully only (Block & Hirt, 2005), but they also need to identify all the non-financial information that can be severely impact the company. In order to deliver effectively information regarding small business accounting and finance, this paper will define the audiences, purposes, and natures of financial statements and managerial reports and explain the use of financial accounting information in making informed and ethical business decisions.
Identify the audiences, purposes, and natures of financial statements and managerial reports.
Information differs from business to business based on organization’s types and styles. In order to deliver all the necessary information about accounting and finance, this paper considers some types of audiences: 1/ Sole proprietorships, 2/ Partnerships and 3/ Corporations.
1.&nb ...