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Record keeping is the means by which we measure and describe the result of economic activities. It is the language of business. It is the way business people set goals, measure result, evaluate their performance. Record keeping is not limited to the business world alone we live in era of accountability, where an individual must renders accounts for his income and must file income tax returns. Normally an individual must supply person to obtain credit etc. The primary purpose of record keeping is to provide decision makers with information in making economic decision. This is seen through the preparation of financial statement such as profit and loss accounts, balance sheet and cash flow statement in conformance with acceptable standards. Record keeping also seeks to identify all the cost components involved in manufacturing a product as well as determine the cost per unit of the product. It also concentrates on the general purpose of the finance reports, by showing the financial reports of the business. Mohammed A. Aziz student of Islamic University college,Ghana
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What is ment by accounting?
Accounting is the keeping of financial accounts. Those who work in accounting are responsible for keeping accurate financial records, and providing reports to business owners, managers, and stockholders.
Explain business as an entity?
The business entity convention in accounting distinguishes the business from any other accounting entity. So the accounts of the owners are kept separate from those of the business.
Why is it important for business records to be separate from the records of the business owners or owners?
It is because of the Business Entity concept where firm(business) is considered to be seperate from its owners. In business records, the owners are treated like the creditors to whom the business is liable.
Owners of business firms are the only people who need accounting information?
False
What is the accounting treatment for Withdrawal by owner of a business?
Withdrawals of owners are treated as a reduction of equity.
What is ment by accounting?
Accounting is the keeping of financial accounts. Those who work in accounting are responsible for keeping accurate financial records, and providing reports to business owners, managers, and stockholders.
How does the historical accounting records of the business enable the owners to check financial performance?
so that they can see their progress so that they can see their progress
Entity concept in accounting?
Entity concept of accounting tells that company and owners of company are two separate things so any amount owner invested in business is refundable by business to it's owners and that's why that investment is liability for business towards its owners.
How can small business owners pay their taxes effectively?
Small business owners can pay their taxes effectively by keeping accurate financial records, setting aside money for taxes regularly, understanding their tax obligations, seeking professional help if needed, and filing their taxes on time to avoid penalties.
Explain business as an entity?
The business entity convention in accounting distinguishes the business from any other accounting entity. So the accounts of the owners are kept separate from those of the business.
Why is it important for business records to be separate from the records of the business owners or owners?
It is because of the Business Entity concept where firm(business) is considered to be seperate from its owners. In business records, the owners are treated like the creditors to whom the business is liable.
Owners of business firms are the only people who need accounting information?
False
When owners invest money in their business the effect on the accounting equation is that the investment increases what?
increase assets and increase owners equity
What is the accounting treatment for Withdrawal by owner of a business?
Withdrawals of owners are treated as a reduction of equity.
What is it important for business records to be separate from the records of the business owner or owners?
It is important for business records to be separate from the personal records of the business owner or owners to ensure clear financial accountability and transparency. This separation helps in accurately tracking business expenses and revenues, which is crucial for tax purposes and financial reporting. Additionally, maintaining distinct records protects the owners' personal assets from liability related to business debts or legal issues. This practice also enhances professionalism and can improve credibility with investors and creditors.
Who are the user's of accounting information?
The users of accounting information include tax specialists, bookkeepers, and most business owners. Accounting information is also used by the IRS and the federal government.
Recording and reporting a business's financial information separately from the owners financial information is an application of the accounting concept?
Business Entity
