Basic Elements of Accounting

Topics: Balance sheet, Accounting software, Accounts receivable Pages: 6 (1482 words) Published: June 19, 2013
1. Functions of departments in Thanh Dung Company
* BOD: The main function of the board is to manage the business in the best interest, primarily of the shareholders. In other words it is their duty to add value to the business which, by definition, requires the director to ensure that the Thanh Dung Company continues to improve its profitability and the price or value of its shares. They will set up targets, policies and strategies to create the premise for the operation of Thanh Dung Company. (Helium website, created on: October 15, 2006, last updated: April 15, 2010) * Factories: the function of factories is manufacturing products. * Super stores: the function of them is exhibiting and sale of products. * HM resource department: recruitment and training employees for Thanh Dung Company. * Sales department:

Its functions are:
* Sales department is responsible for the sales and distribution of the products to the different regions. * Customer Care
* Ensure sales of Thanh Dung Company
* The functions of marketing department:
* developing trademark of Thanh Dung Company
* Ensures customers know the company and the products of Thanh Dung * Expanding the market for the company
* The functions of Design department:
* Product Design
* Creative and continuously improved quality of products to suit customer needs * The functions of Finance department:
* Keeping records of the purchases and sales made by Thanh Dung Company as well as capital spending. * Managers require ongoing financial information to enable BOD of Thanh Dung Company to make better decisions. * Management of wages.

* The function of purchasing material department: For manufacturing company, such as Thanh Dung, the department plays a very important role. If the department work effectively, it will help Thanh Dung savings cost in the production process, increase profitability and competitive advantage of the company in the market.

2. Basic Elements of Accounting
* Assets
Assets are the resources Thanh Dung Company use to conduct business activities. For example, Thanh Dung Co. is a furniture distribution business, company’s delivery truck likely meets this requirement. Assets also must provide some future economic benefit to Thanh Dung. Economic benefits can include cash and credit sales. Since company uses truck to deliver goods to their customers, company’s truck allows them to reap an economic benefit -- sales -- and meets this criterion as well. To record an increase in an asset, employees/accountants of Thanh Dung debit the account, and a credit records an increase. * Liabilities

Liabilities are Thanh Dung Company’s current obligations. They arise from past events such as obtaining a loan to buy equipment for company. These past events create an obligation that company cannot avoid. Company can typically transfer assets to settle liabilities. For example, when Thanh Dung hires employees, company promises to pay cash for their services. Hiring the employee is the past event and company’s promise to pay is company’s obligation that Thanh Dung cannot avoid once the employee provides the service. Issuing a paycheck is the transfer of the asset, cash. An increase in liability is credited, while a decrease is debited. * Expenses

Expenses reduce assets or increase liabilities for a given period. For example, the fuel that Thanh Dung Company’s delivery truck consumes is an expense. When company buys gas for the truck, it reduces company’s cash, which is company’s asset. Similarly, if Thanh Dung buys gas using a credit card, it increases company’s liability. Expenses are often repeating events. For example, Thanh Dung Company must pay company’s vehicle leases by the same date each month. The moment company record an expense depends on the accounting basis Thanh Dung Company is using. Thanh dung can use the accrual basis. When company uses the accrual basis, company records the...
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