Accounting in Business

Question 1

What is the definition of Accounting?

Answer 1

The process of recording, analyzing and summarizing business & financial transactions to supply data in the form of reports, outlining an organizations financial conditions

Question 2

What are the functions of accounting?

Answer 2

• Collection & storage of financial information
• Formulation of comprehensive financial policies
• Preparation of budgets & financial projections
• Accounting of audits & taxes
• Communication with internal & external stakeholders

Question 3

What are the goals of accounting?

Answer 3

• Record keeping
• Payroll Management
• Budgetary responsibilitis
• Financial reporting
• Customer service

Question 4

Describe the 4 major spheres (or segments) of Accounting!

Answer 4

1. Public Accounting
   it can include preparing and issuing public financial reports, offering financial planning and consulting services and preparing tax returns.
   - Financial accounting
   - Tax accounting
   - External accounting
   - Forensic accounting
2. Management Accounting
   to support business managers and help them make good business choices. Typically they prepare detailed financial reports and forecasts for leadership inside the firm by constructing, implementing, and managing a firm’s internal fiscal management systems.
3. Government Accounting
   any type of accounting used to keep and examine accounting records of government institutions and to audit private firms and people that engage in activities that are subject to government taxation and regulation.
4. Internal Auditing
   to supply independent and objective viewpoints to an organization’s finances. Typically, internal auditors handle the mismanagement of financials, fraud, and identity theft to reduce waste and improve operational efficiency.

Question 5

Describe the 8 fundamental accounting principles!

Answer 5

1. Business entity principles
2. Money measurement principle
3. Dual aspect principle
4. Matching principle
5. Accounting year principle
6. Profit realization principle
7. Going concern principle
8. Consistency principle

Question 6

What is IFRS?

Answer 6

International Financial Reporting Standards (IFRS) is a non profit international organization, responsible for developing a single set of high-quality global accounting standards. It aims to develop consistent accounting standards that allow transparent, efficiency, and accountability to global financial markets.