AN ACCOUNTING OVERVIEW

Accounting is frequently called the”language of business”because of its ability to communicate financial information about an organization.various interesred parties,such as managers,potential investors,crediators,and the government,depend on accompany’s accounting systems to help them make informed financial decisions.An effective accounting system,therefore,must include accurate the financial status of an organization.

In order to achieve a standardized system,theaccounting process follows accounting principles and rules.Regardless of the of business or the amount of money involved,common,procedures for handling and presenting finanacial information are used.incoming money (revenues) and outgoing money (expenditures) are carefulully monitored,and transaction are summarized in finacial statement,which reflect the major financial activities of an organization.

Two common financial statements are the balance sheet and the income statement.the balance sheet shows the finanacial position of a company at one point time,while the income statement shows the fianancial performance of a company over a period of time.Financail statement allow interested parties tocompare one organization.for example,an investor amy compare the most recent income statement of two corporations in order to find out which one would a better investment.

People who specialize in the field of accounting are known as accountnts.in the united states,accountants are usually classified as public,private,or governmental.public accountants work independently and provide accounting services such as auditing and tax computation to companies and individuals.public accountants may earn the title of CPA(Certified Public Accountant)by fulfilling rigorous requirements.private accountants work solely for private companies or corporations that hire them to maintain financial records,and governmental accountants work for governmental agencies or bereaus.both private and governmental accontants are paid on a salary basis,whereas public accountants receive fees their services.

Throught effective application of commonly accepted accounting systems,private,public,and governmental accountants provide accurate and timely financial information that is necessary for organitational decision-making.

A.Answer the following question about accounting.Questions with asterisks cannot be answer directly from the text.

1. Why is accounting called the “language of business”?
2. How is a standardized accounting systems achieved?
3. What are revenues and expenditures?
4. What do the balance sheet and the income statement have in common?How are they different?
5. *How might the information contained in financial statements be useful to managers?*How might creditors use this information?
6. How are accountats classified in the united states?
7. What kinds of services do public accountants provide?
8. What is a CPA?*do you have a similar type of position in your country?*Explain.
9. *Which type of accounting-public,private,or governmental-appeals to you the most?
10. *What are some management decisions that might be based on accounting information?

ANSWER:

1.Accouting is called the “language of business”because of its ability to communicate financial information about on organization.

2.In order to achieve a standardized accounting systems,the accounting process follow accounting principles and rules.

3. Revenues are incoming money expenditures are aoutgoing money.

4. The balance sheet and the income statement are two aommon financial statement they are different,the first shows the financial position of a company at one point of time,while the second shows the financial performance of a company over a perio of time.

5. The information contained in financial statements might be use to creditors.it helps them to find out whether the company will be able to repay crdit ontime or not.

6. In the unitd states accountants,are classifred as public,private,and governmental.

7. Public accountants provide accounting services such as auditing and text computation to companies and individuals.

8. A CPA is a certified public accountant. Yes we had formerly faculty of economics graduates of 5 elite universities god ‘Drs……..Ak’dogree.

9. Personal question

10. Some company fianancial decision makings moght be based on accounting information for example the management wont to expands its business to build a bigger factory to introduce new variety of goods.