General Accounting Term Paper

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Accounting Midterm

MBA 621 Financial and Managerial Accounting

Teeya Clarke

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Accounting Midterm

MBA 621 Financial and Managerial Accounting

Teeya Clarke

Abstract

Financial Accounting is essential for financial accountability, which is essential for a business and companies to keep track of their financial records. There are many areas of accounting and government rules that companies has to follow. As a business grows, management has to be able to keep track of costs, losses and profits of the company, using an accrual accounting system. This paper describes the managerial areas of accounting and how it must be applied, and how to apply accounting methods and techniques. This document also gives a detailed description of terminology that is used along with defining each definition of each section.

A company has to be able to provide financial information to stakeholders, customers and people that invests in the company. They also have to be able to provide financial records to government officials and auditors if needed.

Accounting can be traced back to the evolution of the number system itself. It has been there in one form or the other, since the human beings started exchanging things. They used to keep records of the incomes and expenses to the treasury. However, the real beginning can be traced to the reference to double entry system in the book published about 500 years ago. It was the great Italian Mathematician, Luca Pacioli, who authored the book and got it published in 1494.(Times Article) Every transaction has two aspects. The double entry system provides for recording both aspects of a transaction in such a manner as to establish an equilibrium. A system, in which goods are exchanged for goods, is called “Barter System” (Reagen). Barter is the exchange of resources or services for mutual advantage, and the practice...