Question

Describe what to look for in evaluating a potential site layout.

9. Describe the basic concepts of accounting as described in the textbook. 1

10. Specify the requirements for a small business accounting system.

11. Explain the content and format of common financial statements.

12. How do use accounting information as a tool for managing your business effectively

13. Develop a complete set of budgets for your business.

14. Use accounting information to make better business decisions

Answer 1

BASIC CONCEPTS OF ACCOUNITNG

Accounting is the process of recording, classifying, summarising monetary transaction and events and presenting them in the form of understandable statements. Such statements are known as Financial Statements.

Accounting starts with source documents and voucher creation and end at Preparation of Financial Statements.

REQUIREMENTS OF SMALL BUSINESS ACCOUNTING SYSTEM

A small business accounting system like TPS(Transaction Processing System) shall be able to record accounting transaction and classify them into appropriate ledgers. It should be able to present Trial Balance of all the Ledgers.

CONTENT AND FORMAT OF COMMON FINANCIAL STATEMENTS

Balance Sheet:It presents the assets, liabilities and capital of the Business in an Vertical Format.

Statement of Profit and Loss: It presents the sales, expenses, taxes and net income of the business in an Vertical Format.

Cash Flow Statement:It represents the Cash Inflows and Outflows from various business activities in Vertical Format.