Problem with Accounting.

What’s the difference between profits and profitability? In most companies, a net income deficiency of 30% or more, let me explain. Accounting information is at the core of virtually all of our business processes. It is axiomatic that accounting has two roles: providing financial information and providing management control information. The problem is that it is very good at the first role, and surprisingly poor at the second. Financial accounting is critical to every business. The objective is to present an accurate picture of a company’s overall performance – its profits. It grew up in the time of quill pens and arm garters, and its role is to tell shareholders how much their company earned. This discipline is well perfected and highly regulated. Just ask the Audit Committee...

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Intermediate Accounting

Accounting students usually take three years of accounting courses to complete a bachelor's degree at most educational institutions. One year of an accounting degree includes intermediate accounting, a second-level accounting class.Features Intermediate accounting introduces students to a deeper and broader level of accounting theory. The typical intermediate accounting format requires two semesters of intense conceptual course work. Topics Topics found in intermediate accounting include the conceptual framework of Generally Accepted Accounting Principles (GAAP), financial ratios analysis, equity accounting, investment strategies and financial statement preparation. Significance Because intermediate accounting courses represent the beginning...

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About Accrual Accounting

Accrual Accounting is An accounting method that measures the performance and position of a company by recognizing economic events regardless of when cash transactions occur. The general idea is that economic events are recognized by matching revenues to expenses (the matching principle) at the time in which the transaction occurs rather than when payment is made (or received). This method allows the current cash inflows/outflows to be combined with future expected cash inflows/outflows to give a more accurate picture of a company's current financial condition.  Accrual accounting is considered to be the standard accounting practice for most companies, with the exception of very small operations. This method provides...

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Accounting Information System

An accounting information system is designed to record all transactions of a business. An accounting clerk enters all business transactions into the program and the transactions automatically are posted to the corresponding accounts. This is important because any time information is needed, it can found on the computer and is organized. Accounts Payable An accounting information system allows for easier payments made on accounts payable. Many systems are designed to pay all bills due with a click of a button. A date is selected and checks are automatically made out for all bills due. Most systems allow a clerk to unselect certain bills if a company is not ready to pay a specific bill. Accounts Receivable This type of system also allows for easier billing. Information is recorded on the system...

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Value Product

The value product (VP) is an economic concept formulated by Karl Marx in his critique of political economy during the 1860s, and used in Marxian social accounting theory for capitalist economies. Its annual monetary value is approximately equal to the netted sum of six flows of income generated by production: wages & salaries of employees. profit including distributed and undistributed profit. interest paid by producing enterprises from current gross income rent paid by producing enterprises from current gross income, including land rents. tax on the production of new value, including income tax and indirect tax on producers. fees paid by producing enterprises from current gross income, including royalties, certain honorariums and corporate officers' fees, and certain leasing fees incurred...

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Value added

Value add refers to "extra" feature(s) of an item of interest (product, service, person, etc.) that go beyond the standard expectations and provide something "more" while adding little or nothing to its cost. Value added features give competitive edges to companies with otherwise more expensive products. In economics, the difference between the sale price of a product and the cost of materials and outside services to produce it is the value added per unit. Summing value added per unit over all units sold is total value added. Total value added is equivalent to Revenue less Outside Purchases (of materials and services). Value Added is a higher portion of Revenue for integrated companies, e.g., manufacturing companies, and a lower portion of Revenue for less integrated companies, e.g., retail companies....

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Double counting

Double-counting in accounting is an error whereby a transaction is counted more than once, for whatever reason. But in social accounting it also refers to a conceptual problem in social accounting practice, when the attempt is made to estimate the new value added by Gross Output, or the value of total investmen...

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