Conta Ingles 3G Administrativo

UNIT 3 Accounting Process

1. What is accounting?


2. What is its purpose?


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1. What is accounting?



It is quite simple, accounting is a language: alanguage that provides information about the financial position of an organization.






Accounting is the way companies record and measure their financial transactions. By doing so they can,at a specific point in time, and over a stipulate period, be able to assess their performance and wealth.



2. What is its purpose?


Its purpose is helping people make decisions. Theinformation required can be classified into two broad main categories:


1. Financial information: This is the information that is used by external users such as shareholders, banks, creditors, thegovernment… to make decisions involving the organization and its operations. External users can be divided into two categories: those having direct interest in the company and those having indirect interest.Shareholders want information about what their investment is worth and whether they should buy or sell shares; bankers or other creditors want to know whether the organization has an ability to payback money lent;


2. Managerial information: internal users are the people who run the business. In order for the managers of a company to make the best decisions, they need to have specificinformation prepared. We can talk about management at de top, middle and lower levels, their requirement of information is different because they make different type of decisions. Accounting information isused to set budgets, analyse different options of cost basis, modify plans as they need arises, and control the work that is being done.




EXERCICES

1. Complete the sentences belowAccounting is the language of…………………………..


Accounting is used
for……………………….and……………………financial……………….


Accounting makes possible
assess………………………………..over………………………………..


Accounting makes...