Essay
Unit 5 - P1
- Module
- Unit 5 - Business Accounting
- Institution
- PEARSON (PEARSON)
describe the purpose of accounting for an organisation
[Show more]
Seller
Follow
Content preview
There are many purposes for accounting within an organisation such as; Record of Trans-actions, Monitoring Activity, Control, Management of Financial Performance and Measure-
ment of financial performance.
Record of Transaction
Record of Transaction is where transactions are recorded in different methods; such as in-
voices, bookkeeping and folders/journals.
By keeping records of invoices from suppliers and customer transactions, paychecks and
all other expenses that are covered monthly or one-time purchase, they allow the business
to run smoother, as it allows the organisation to keep track of its money, income and ex-
penses. If a company is struggling to manage its transactions it can become unaware of
what bills they’ve paid and which bills they have not paid. By keeping up to date records of
their transactions it allows managers to look at reports and find areas to which are impor-
tant and other margins to which they can cut costs. As if they fail to keep track of their fi-
nancial performances they could be paying incorrect bills or failing to pay bills.
Monitoring Activity
By monitoring activity it allows the business to be updated in their different practices they
conduct. It allows them to observe their sales, payments, expenses and cash balance etc.
By keeping records on a regular basis, it provides a good indication of how the business is
doing, where they are earning their biggest profits and know their largest losses. It also
helps them identify which payments they have paid already. It also allows them to keep
track of their day to day expenses and keep them knowledgeable on their available funds.
Control
Control is a very important aspect of accounting as it allows bookkeepers and other jobs in
a similar position to track the records made. It also allows there to be a physical record of
the transaction. It can create an opportunity to control different sections within a business
and can oversee any relation between them and control procedures or consult with man-
aging directors with advice for control.
Management of the business
Management of the business is given to a responsible personnel to hold account for; plan-
ning, monitoring and controlling resources. Better management of the business would al-
low the business to make better decisions and successfully handle the control of resources
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Sophia23. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £5.48. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
53068 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy revision notes and other study material for 14 years now