Unit 1 P1 Unit 5 Business

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P1 - The purpose of accounting and the categorization of business income and expenditure I have been asked by my line manager in C&V Fashion to get an understanding and think about the accounting departments role in the business. The stakeholders that are involved with C&V Fashion are – * Owner of C&V * Lenders * Suppliers * Investors * Employees * Customers Owner of C&V The owner of C&V is the only stakeholder of the business. He will be the most involved and influential character within the business. C&V is a sole trader business, which means there is one person who owns it. Lenders Lenders such as the bank lend a company or somebody opening a new business a sum of money on a short…show more content…
The business owner or (if it’s a large business) a bookkeeper is in charge of recording all of the money going out (from sales) and all the money going out, such as expenses. If a business fails to achieve this they could find themselves not chasing payments, forgetting to pay bills or even worse, getting in trouble with HM Revenue and Customs (HMRC). When a business fails to record their transactions correctly it is impossible for them to publish their financial performance accurately and therefore tax payments may be wrong. Monitoring Activity There will be somebody within the business that will update the records on a regular basis and therefore will show a good indication on how the business is doing. The reason C&V would keep their records up to date is to ensure that they have received all of their payments from customers but also to ensure that they pay their suppliers. Having records also means that you can see how the business is doing in terms of overall sales. A company should always keep an eye on their bank balances to ensure that they have sufficient funds to meet their day-to-day expenses.

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