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Principles of Financial Management (doc)

   

Added on  2021-01-02

9 Pages1812 Words140 Views
Accounting Project

Table of ContentsTASK...............................................................................................................................................3P1 Investigate the principles of managing and monitoring financial performance:....................3P2 The double entry book-keeping system of debits and credits to record sales and purchasestransactions in a general ledger:...................................................................................................3P3 basic trial balance applying the use of the balance off rule to complete the ledger:..............8REFERENCES................................................................................................................................9

TASKP1 Investigate the principles of managing and monitoring financial performance:In order to evaluate financial performance and financial position of organisation it isnecessary to manage and monitor activities of organisation and this is possible throughunderstanding principles or basic guidelines of managing and monitoring financial performance(Edwards, 2013).The principles of managing and monitoring financial performance are asfollows:Preparation of key financial statements: To manage and monitor the financialperformance, it is very important to prepare the financial statements. Financial statementsare statutory records of the financial transactions or activities occurred in business. Thesedefines the overview of financial position and performance of a business.Analysis of overheads: Analysis of overheads is also required to manage and monitorfinancial performance. Overheads includes the costs required to run a business but are notdirectly linked with production of products. Preparation of inventory records: Inventory refers to the stock of products that areproduced for the purpose of sale. It includes the quantity of raw material purchased, stockused for production of product, quantity of material gone waste and how much inventoryproduced. Preparation of such records are essential as these helps in calculation ofdifferent ratios. Competitive analysis: Competitors analysis is required to make strategies against thecompetitors to remain in the position as well as to compare the performance with themand making further plans, policies.P2 The double entry book-keeping system of debits and credits to record sales and purchasestransactions in a general ledger:Under double entry book-keeping system accounting is done by accountants using doubleentry accounting method in which two accounts are effected while recording a financialtransaction. In this method every accounting entry is done through two accounts. By recordingtransactions under book-keeping system it is easy to post them in respective ledgers (Hale andHeld, 2012). In present time almost all firms are using double entry system and, balance sheet

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