THE NATURE AND THE USE OF ACCOUNTING INFORMATION IN BUSINESS ORGANIZATION

THE NATURE AND THE USE OF ACCOUNTING INFORMATION IN BUSINESS ORGANIZATION

Business organization can be classified into small and large firms. In the part of small firms a specialist institution is set up to provide a financial support for it ,and the public will lack the enthusiasm for the Purchasing securities from the small firm whose shares are not quoted on the stock exchange.

Accounting information provides management with the needed information for use in concluding the affairs of the business and reporting to the owners.

 Five ingredients of accounting system, are:

1. . Basic business documents or forms such as cheque and invoice.
2. Journals in which the effect of transaction on assets and equities are analyzed in terms of debit and credit

Ledger, which shows that results of transaction as summarized according to each asset or equities.

1. The financial report which reports on how enterprise scared for that period.
2. The procedures for preparing these records and report.

Studies carried out over the year indicated the importance of accounting information in a small firm and it has been proved that one quarter of small scale business turn to their accountants when they need help this shows that even the smallest firm need to be compensated if enough expenditure is made for the purpose of acquiring an accurate accounting information.

In a large firm, it is the manager or board of directors that have or own the managing and implementing of accounting information their responsibility will be seen that the decision made are put into effective use.

Managers that fail to meet the expected target will frequently be replaced. Within the management there will be a management structure with a line of authority.

If the management of any business makes implementations based on their accounting information, they will execute plans, controls and make decision making very effective.

Over the past twenty years the nature of business organization has changed dramatically.

Accounting information technology has revolutionized the ways in which information essential to the management in their decision making is processed.