Accounting information process Essay

ACC 402
FOUNDATION ACCOOUNTING 2
TRIMESTER 1
ASSIGNMENT 1
NAME AMENDRA ANAND MILAN 1D2012002271
NIKEETA NANDANI DEVI 1D 2015128869
LECTURER MS.SHAENAZ
ASSIGMENT QUESTIONS
QUESTION 1 ACCOUNTING INFORMATION PROCESS
Accounting is the recording of financial transactions plus storing, summarizing and presenting the information in types various reports such as annual reports. For business it helps in collection, recording and classifying, summarizing projecting and planning. The process by which accounting information is collected reported is called financial management. Accounting has its own objectives that drive accounting process which may be as follows.
1) to find out the financial gain or loss for any for any particular period.
2) To maintain various journals for recording day to day none cash transactions
3) To maintain various ledger accounts to find out the exact amounts of incomes and expenses or gain or losses.
4) To find out the position of liabilities on a particular date.
5) To maintain the cash accounts through the cash book to find out the cash balance on any particular day
This basically helps the management frame policies for controlling cost, preparation of quotation or competitive supply
QUESTION 2
Ethics in accounting refers to a moral system that provides criteria for evaluating right or wrong. it is a primary field. Ethics is the practice of behavior that does not allow for deliberately inaccurate or incorrect accounting practices .it helps to understand the financial data as clearly and honestly as possible in all situations' certified accountant should not aloe bias, conflict of interest or to dominate business judgements.a accountant should act diligently and in accordance with technical and professional standards when providing professional services. A accountant should take steps to ensure that those working under the professional accounts authority in a professional capacity. Ethics in accounting are concerned with how to make good and moral choices in to preparation, presentation and disclosure of financial statistics.
QUESTION 3
Accounting concepts are set of board conventions that have been formulated to provide a financial reporting. This concepts and principals ensure that the users of financial information are not misleading by the accounting policies. Rules of accounting that should be followed in preparation of financial reports are the following fundamental concepts
1. Accural basis assumption effects of all transactions and events are recognized in accounting records when they happen and not when the cash is received or paid.
2. Consistency concept once an accounting method has been chosen, that method should be used unless some new version is implemented to improve reported financial results.
3. Going concern concept the business body for which accounts are being prepared is in good condition and will continue to be in business in the foreseeable future.
4. Prudence concept revenue and the profits are included in the balance sheet only when they are realized. There is a reasonable certainty of realizing them but liabilities are included when there is reasonable possibility of incurring them.
Reference
Form 7 notes
Acc 402 lecture notes
http//accountingtheory.weebly.com/accounting-and-its-objectives.html
http//www.businessdictionary.com/definition/accounting-concepts.html