Accounting - three big areas

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There are three important areas in accounting, which must be considered in accounting for any modern business. The three are financial, cost and performance.

The first area, namely financial accounting, is especially useful for determining the outcome of the work on a regular basis, such as a year. This will help determine the future course of action long term. In economic terms, financial accounting treats the money as a factorProduction.

And cost accounting management are tools that allow management to take decisions on a daily basis. Costs and benefits are involved does not make sense for himself. These two functions assist management in carrying out activities with other important factors in the conduct of business. Important factors could supply, demand, competition, availability of raw materials, logistics, etc.

The second area, namely cost, is to findThe value of direct costs and indirect costs involved in production. From this value, management can make an informed decision on improvement of production performance. In economic terms, the cost is a measure of economic performance. This information provides a clear indication of management of the economic performance of manufacturing facilities of the company.

Costing also helps the sales manager for pricing. But as a measure of the cost of economic performance, therecan not be taken as absolutely accurate basis for pricing into account. This is because the prices are more a business decision. It would be wrong not to recall here that prices are largely determined by factors of the market. Prices depend more on supply, demand and competition and less cost. For example, a strong demand mean a lack of competition allows companies to higher prices for its products that far exceeds the cost into consideration.

The third area, namely the managementAccounting is closely related to cost accounting. Although it has evolved from cost accounting, management accounting has a wider role in management decisions involved. It measures the economic performance of the activities of society as a whole, against the economic context in which it operates. This function of accounting to link the financial and cost information in another aspect.

Finally, management accounting is instrumental in supporting andManagement consulting on major business decisions. E 'handling of the economic impact and consequences of their decisions. In economic terms, this implies a careful study of money as an economic resource, while for treatment as a measure of economic performance. This allows the administration to take as an economic factor of production, such as return on investment.

Thus we see that accounting has played a significant role to play in threedifferent areas, which are also crucial. With the advent of computerized records, it became much easier to control for the management of accounting information on the tips of the fingers. Financial programs enable financial statements and cost statements and various MIS are generated almost instantly by pressing a button. Now, only the laborious data entry accounting. Financial managers must ensure that meaningful data is produced in the system of meaningInformation. Kategorisierung die richtige getan werden muss, und unter allen Tippfehler Umständen vermieden werden, sicherzustellen, genauen finanziellen stellt die Informationen für das Management.