Accounting Is Dubbed “Language” of Business Activities

Topics: International Financial Reporting Standards, International Accounting Standards Board, Generally Accepted Accounting Principles Pages: 4 (1147 words) Published: March 24, 2013
Essential link in objectives of business
-----‘Accounting is dubbed “language” of business activities conducted by firms as it is used to communicate business transactions per se to all stakeholders’

According to Weygand, Kieso and Kimmel (2012, p.4), the main purpose of accounting is consists of three basic activities, identifying, recording and communicating the business events by users. These three activities help the firm to operate the business to make decision be meaningful. Business has closely connection when doing transaction with their stakeholders by using the accounting, in order to make maximize profits.

Role of firm
Firm (also known as business or enterprise) is an organization involved trade goods and services to consumers. Business use different models and plans to figure out their target and outcome, in order to achieve organizational goal and achieve sufficient profit to finance our company growth, which create value and wealth for our shareholders. There are three forms of ownership, proprietorship, partnership and corporation. Every type of business receives different targets and objectives; it is because the employer or shareholder is taking different level of risk and responsible. Each organization’s employer sets its objectives to overcome difficulties. It relates to produce in different firms with different types products and how to satisfied their consumer, such as restaurant produce well-prepared food to hungry customers and cars factory fabrication and assembly of cars to produce in high-quality to buyers. Therefore, the method used or issued meet should be different.

Each type of business system will meet different levels of target. The objective, however, is quite similar to each other. As Edmonds, McNair and Olds (2006, p.4) mentioned, in most cases, the companies aim to satisfy consumer preferences efficiently (at lowest cost) and aftermath with higher earnings. During business transaction, the...
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