Evaluate the Output of the Process and the Quality Gateways

In: Business and Management

Module: Financial Management and Control Unit: Sources of Finance and Costing Concepts Lesson: Long-Term Sources of Finance
© Resource Development International Ltd. (RDI) 2009

Long-Term Sources of Finance

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Accounting is an essential function in any business - whether it is a sole trader or a multinational corporation. It involves two key concepts: Bookkeeping - where a detailed recording process is used to identify every financial transaction that takes place involving an organisation. This is a painstaking process requiring an excellent eye for detail, and measures the financial effects of economic activity. Financial reporting - where details of the financial activities of an organisation are collected and presented in a clear and concise manner for stakeholders and other interested parties. Within these concepts, accounting also develops the internal controls necessary in an accounting system, thus serving to minimise errors in recording the, often, large number of business transactions within an accounting period of a year. Appropriate internal controls will be developed to prevent the occurrence of theft, embezzlement, fraud and dishonest behaviour. These form an important part of the responsibilities of accounting.

What do you consider the purpose of management accounting?

Drury in Management and Cost Accounting has argued that Management Accounting consists of three functions: 1. Allocate costs between cost of goods sold and stock for internal external prompt reporting. 2. Provide relevant important to help Managers make better decisions 3. Provide information for planning, control and Performance Measurement. The Chartered Institute of Management Accounts [CIMA] prescribes the following definition in explanation of what it perceives to be the detailed role of Management Accountancy. Management accounting is: "An...

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