Chapter 12.docx

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University of Calgary
Management Information Systems
MGIS 317
Ronald Schlenker

Chapter 12 Limitations of published accounts Financial accounting Management accounting Collection of data on daily transactions Preparation of information for managers on  any financial aspect of a business, its  departments and products Preparation of the published report and Analysing internal accounts such as   accounts of a business – balance shit, income departmental budgets  statement and cash statement. Information is used by external groups Information is only made available to  managers of the business – internal users   Accounts usually prepared once or twice a Accounting reports and data prepared as and  year when required by managers and owners   information risk to fall out to competitors. Things that mustn’t be present making company annual reports:  Details of sales and profitability of each good or service produced by the company and of each division or department  The research and development plans of the business and proposed new products  The precise future plans for expansion  The performance of each department or division  Evidence of company’s impact on the environment  Fture budgets or financial plans. financial accounting Foundations of accounting - accounting concepts and conventions  Important to base all accountings in the same base basic principles.  If not it will be impossible to compare with accounts of other companies based in different countries.  Cause huge problems for multinational companies as if accounts based on activities recorded in other countries using different concepts and conventions. (There will be no As or A level Business Studies question based on this principles The double-entry principle  Every time business engage in transactions, there will be two sides to this transactions  So this means business must include this transaction twice; Such as sale of goods to a costumer on credit will lead to stock falling in value (1 record) and the costumer owing money to the business (2 record)  Some computer programs specially design for keeping accounts would be used for this double- entry task. Accruals  Accruals arrive when services have been supplied to a busi
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