MANAGEMENT BENEFITS OF ACCOUNTING PROFESSION TO BUSINESS ORGANIZATION

CHAPTER ONE

1.0            INTRODUCTION

Purpose and nature of accounting, the underlying  purpose of accounting is to provide financial information about business  enterprise. The financial information provided by an accounting system is needed by the management decision making, to help them plan and control the activities of business organization, financial information is also needed by outsider that is creditors, potential investors, the government and public who were supplied money to the business or who have other interest in business  that will be served with information about the financial position and operating results.

In order to provide useful financial information about a business  enterprise, we need some means of keeping back of the daily business activities and the summarizing results in accounting system.

The first function of accounting system is to creat a systematical record of the daily business  activity, in the term of money for instance, goods and services are purchase and sold, credit extended to customers, debts are incurred, and services and cash is received and paid out.

These transactions are typical of business events which can be expressed in monetary terms and must be enter in accounting record. The more expression of an intent to but goods or services in the future does not represent a transaction.

Transaction refers to a completed action rather than to an expected or possible future action. The recording of a transaction may be performed in many ways that is by writing with pen or pencil, by printing with mechanical or electronic equipment or by punching holes or making magnetic impressions on cards or tape. Not all business events can be measure and  describe in monetary terms.

Therefore, it is not shown in the accounting records the appointment of a new chief executive, the signing of a labour contract, or the appearance of a new competing business.

In addition to compiling a narrative record of events as they occur, transactions and events into related group or categories are classified.

The classification enables as to report a mass of detail into compact and  lessable firm. For instance grouping all transactions in which cash is received or  paid out, a logic step in developing useful information about the cash  position of  a business enterprise.

To organize accounting information  in a useful form the classified information is summarized into accounting reports designed to meet  the information needs of  the decision makers.

These three steps recording, classifying and summarizing are the means of creating accounting information.

It also involves communicating this information to an interested  parties and interpreting as it relates to specific business decisions.

1.1     STATEMENT OF THE PROBLEM

The statement of the researcher problem serves to relied upon the information in the title of the  study. This study is concerned with the examination of the management benefits of accounting profession in business organization. “The problem could be categorized as the concept of management business organization and the benefits financial accounting plays to this concept”. This research project has two important parts, the questions  and the answers to them.

This research also seeks to find out the extent of which the financial accounting has help management business organization by addressing them in the following.