IT in Small Business Accounting Assignment Example | Topics and Well Written Essays - 1250 words

IT in Small Business Accounting - Assignment Example Both sides of the Balance Sheet increase by $5000. Journal entry that would affect the Income Statement would be: DR CR Retained Earnings $2000 Wages Expense $2000 Assumption: Retained Earnings decreases with the debiting and Wages Expense account decrease while being posted to the expenses in the Income Statement. Assignment 2 The primary objectives of accounting are to fairly present the financial information in the financial statements with necessary disclosures in accordance with Generally Accepted Accounting Principles (GAAP) so that users of the financial statements can use them to make informative decisions. This fulfills one of the main objectives which is to give assurance to the public about financial statements. The main objective of the firm producing financial statements is to monitor business performance throughout the year and possibly compare with past results. When comparative financial statements are compiled, a better understanding of the level of consistency can b e obtained. A part of this objective of accounting is to judge the performance of management and employees. Why isn't the company doing well when Sales have gone up? Are employees being careless with materials? Using this financial information the company can analyze the data to find out why the budgeted amounts for the operations budget and the actual data differ. In doing this, management will be able to answer questions about employee performance and it's own performance. Another objective is to record all expenses and revenues in the correct period. This is important since in order to find the financial position we must know when to post revenues and expense to the income...This fulfills one of the main objectives which is to give assurance to the public about financial statements. The main objective of the firm producing financial statements is to monitor business performance throughout the year and possibly compare with past results. When comparative financial statements are c ompiled, a better understanding of the level of consistency can be obtained. A part of this objective of accounting is to judge the performance of management and employees. Why isn't the company doing well when Sales have gone up? Are employees being careless with materials? Using this financial information the company can analyze the data to find out why the budgeted amounts for the operations budget and the actual data differ. In doing this, management will be able to answer questions about employee performance and it's own performance. Another objective is to record all expenses and revenues in the correct period. This is important since in order to find the financial position we must know when to post revenues and expense to the income statement. We also need this information to prepare tax records. Another objective is to prepare for the future of the company. Management needs to know which parts of the company are functioning inefficiently or efficiently. Certain departments m ay be functioning inefficiently and its important to know why and what can be done to prevent waste or inefficiency.