Determine the effect of several transactions on assets, liabilities, and owner’s equity. 4.27 Balance Sheet. Using accounting records prepare a balance sheet and determine the balance of the owner’s equity account. 4.28 Balance Sheet. Using accounting records prepare a balance sheet for a business and determine the balance of the cash and owner’s equity account.
Ratios can tell if the business is using its assets appropriately, and if liabilities of the company are well-managed. It shows whether a business can invest in more capital, or if there is room for business growth. It shows whether a business will be able to pay off its debts or their short-term expenses or their daily expenses. It basically shows the strength and weaknesses of the business. It helps for forecasting on making certain financial decisions.
Why should organisations collect, file and maintain accurate financial records? To have a record of how the business is running. To determine how the business is sitting financially and to inspire different processes to assist in growing the business. It will also display what money is going where and whether there is any room for alterations in staffing, produce, and marketing. Basically, it is used to anaylse the business as a whole and per section and to determine performance.
ACC202 Module 1 CAS Trident University 15 January 2015 There are two different types of accounting that I will be discussing. There is financial accounting and managerial accounting. Financial and management accounting are both important tools for a business, but serve different purposes. Financial accounting is used to present the financial health of an organization to its external stakeholders. Board of directors, stockholders, financial institutions and other investors are the audience for financial accounting reports.
Examples of current liabilities are creditors. According to business alpha their credits
Accounting is a way to communicate financial information about a business to those who wish to use the information to make decisions. Two types of accounting are management accounting and financial accounting. Management accounting is used by managers to run a business. Financial accounting provides information to various external users. (Horngren, 2012) Financial statements and their related disclosure notes provide information such as the results of operations, the financial position of the business, and cash flows.
For each type, give an example of a business transaction that would be relevant Three types of management decisions are what type of long term investments to take on (Capital Budgeting), where to get the financial backing for the investments (Capital Structure), and how to manage the everyday financial activities (Working Capital Management). Some examples of capital budgeting would include purchasing a new building, purchasing expensive equipment, or developing a new product line. Establishing the capital structure for the corporation could include bringing in other owners or borrowing money from lenders. Deciding how much to outsource and borrow are crucial when considering the return on the investment. Working capital is a firms short term assets that manages daily cash flow.
By using the information, manager can use cost of capital for restructure the market price and earning per share in order to bring advantage for company. By extension, it can help determine the decision whether to cancel or invest in project. Moreover, the cost of capital can help investors to determine the performance of the top management. With the intention of compare the ability of financial managers based on evaluation between the
E) both B and C of the above. Answer: A Topic: Chapter 2.1 Function of Financial Markets Question Status: Previous Edition 3) Which of the following can be described as involving direct finance? A) A corporation's stock is traded in an over-the-counter market. B) People buy shares in a mutual fund. C) A pension fund manager buys commercial paper in the secondary market.
I believe that they need to get a business manager first that can help the business grow by coming up with new ways to restructure the company. Also, he/she needs to build a marketing plan for the services offered and software produced, and decide what other hires are needed to get the plan implemented. 3. Question: Do you think the major hesitance of changing the organization is the first time costs that will be incurred or more so the behavioural and structural changes needed? From the way Pay Zone is portraying its services and future plans, especially thinking of retiring soon, the owners will contemplate costs.