FINANCIAL ACCOUNTING

Accounting Does Not Need Any Theory or Methodology

Accounting Does Not Need Any Theory or Methodology

Introduction

The statement that is “accounting does not need any theory or methodology” is incorrect as the concept of accounting is base on the framework which is based on the theory or methodology. Accounting is a social science, which is responsible for studying, measuring and analyzing the assets of companies and individuals, to serve in the decision making and control, presenting the information previously recorded, so systematic and useful for different stakeholders. It also has a technique that produces systematic and structured and valuable quantitative information expressed in monetary units about transactions that affect the economic entities and certain identifiable and measurable economic events that affect it, for the purpose of providing it to the various audiences interested.

The purpose of accounting is to provide information on economic and financial situation of a company at a given time and the results obtained over a period of time, which is useful to the users of accounting in making their decisions, both for the past management control, as for estimates of future results, providing such decisions of rationality and efficiency.

Discussion

Definition

Accounting is a technique that deals with record, classify and summarize the operations of a business trading in order to interpret the results. Consequently, managers or directors through accounting may draw on the action to continue their businesses through data and statistical accounting. These data provide insight into the stability and solvency of the company, current receipts and payments, trends in sales, costs and expenses General and others. So you may know the company's financial capacity. The accounting is a technique that deals with record, classify and summarize the operations of a business trading in order to interpret the results. Consequently, managers or directors through accounting may draw on the action to continue their businesses through data and statistical accounting (Groppelli and Ehsan, 2006, 23-39). These data provide insight into the stability and solvency of the company, current receipts and payments, trends in sales, costs and expenses General and others. So you can know the financial ability of the company. It is also said that accounting is the language of business but there is no universally accepted definition. Accounting is responsible for:

- Analyze and evaluate economic outcomes.

- Group and compare results.

- Planning and synthesizing procedures.

- Monitor compliance of schedule.

Accounting is the organizational unit of company that creates records. The concepts of accounting and bookkeeping are used colloquially often used interchangeably. In economics, the term accounting only the methodology or activity. Depending on the size and type of organization it may be useful to divide the accounting into sub-areas. The financial accounting transactions posted to the accounting and profit and loss account are necessary.

- The Accounts Receivable handles the demands of customers.

- The Accounts Payable processes the liabilities to suppliers.

- The Asset Management manages assets of fixed assets.

- The payroll department handles the wage and salary slips off.

- The cost and performance accounting for associates, which costs ...