Importance of Accounting Information for Decision Makers

Student Name:
Unit Title: Recording Business Transaction
Table of Content

INTRODUCTION
Accounting refers to a process that includes recording, classification, analysis and
summarising of financial transaction of an individual within business unit and this is only
carried out with the help of accounting. Basically, accounting is a language of finance. Which
aids company to convert the working of a firm into tangible reports that can be differentiated.
All these records and reports is made in that form that aids in evaluation of financial
performance along with position of company (Neeraj and et.al., 2017). In which the present
assignment consist question that includes financial transaction of various company and need
to generate trail balance, along with income statement from that records. Further the benefits
and disadvantages in context of commercial business is discussed. Lastly the impact of
covid-19 on productivity and profitability of company is analysed.
Assessment 1: Part 1.
a)
Decision makers: All the individuals who are responsible for formulation of decisions
for a business are known as decision makers. For all the firms it is very important to make
sure that they are able to maintain interest of all of them so that the long term decisions
could be formulated. There are various types of decisions markers for the entities.
Discussion of all of them is as follows:
 Shareholders: All the individuals or institutions which are legally owning specific
shares of an entity are known as shareholders. These are also known as members of
corporation (Wang, Lau and Mao, 2019). It is very important for all the businesses to
make sure that they are able to manage shareholders as it can help to carry out all
the operational activities in systematic manner. They are important for company

because they provide funding to execute all the operations and facilitate the entity to
sustain in the market. If an entity will not be able to manage them then it may result in
issues for business in future.
 CEO: A Chief Executive Officer is a person who is the highest ranking executive
within the organisation. The main responsibilities of a CEO include formulation of
corporate decisions, management of resources and operations and communicate
with board of directors and other corporates. For all the businesses CEOs are very
important as they fill the gap of communication between board of directors and other
employees of the organisation. If they will not be managed properly then it may result
in negative impacts upon functionality of business.
 Board directors: A group which is responsible for supervising the whole
organisation is known as board of directors. This group is focused to conduct regular
meetings so that policies for executing operations of business could be formulated.
They are very important for businesses because they can facilitate an enterprise to
sustain in the market with the help of effective decision making of them. As they are
elected to represent the shareholders so they share detailed information of
requirements of them so that policies to retain the shareholders could be formulated
(Dolnicar, 2017).
Accounting information is very important for all the decision makers as it can help
them to analyse the actual position of business and then formulate future decisions for
betterment of business. Some of the decisions makers for the entities are CEO,
shareholders and board of directors. All of them need financial information and need of them
regarding the details could be analysed with the help of following discussion:
 For all the decision makers accounting information is very important because it can
help them to determine that the business is able to perform all the operational
activities in systematic manner and reach to all the long term business goals.
 Financial information is needed by CEO as it can help them to determine that the
business is performing appropriately or not. Apart from this, they can also analyse
that the financial position of the company is appropriate or not as compared to the
competitors.
 The need of financial information for Board of Directors is very high because they are
working as the representatives of shareholders and in order to retain them for long
period they need to share proper and detailed information of company’s position. If
they will not be able to get the financial information, then it will be very difficult for
them to provide details of actual status of business to the shareholders (Götzer,
2018).

 Shareholders are the owners of business and financial information is also needed by
them as it can help them to analyse that the entity in which they have invested their
funds is able to sustain in the market. By using the information, they can formulate
decisions for future to provide funding to the entity to carry out operations.
 The importance of having financial information for all the decisions makers is very
high as it can help them to make decisions for future to improve performance or
invest funds. If the information will not be gathered by them then it may result in long
term issues for them in future.
BT. British Telecom
Financial accounting involves recoding, analysing and summarising of all financial data in
that manner which can be used in reports. And these types of report which carries financial
information is useful for making effective plan and strategies related to finance and budget
(Berry, 2018). By this company will able to deal with their short outcomes in future. As well
as able to offer a better consumer service to end users. All the function starting from
recruiting to firing includes determination of sales target, planning of promotional activities
along with its budgeting and for choosing a specific techniques and software for performing
different function and operation. And all these decisions are taken by the senior executive
and managers of corporation. Responsibility of decision making within the firm depends on
the organisational structure of company for instance the in larger size company the
organisational structure that management team followed will be a hierarchical structure,
managed by top management or board of directors so that they will able to accomplish their
goal within stipulated time period. In relevance to this, a BT British telecom is a large size
organisation based on stock exchange and board of director managed by its CEO, Philip
Jansen and takes all strategic decision for the beneficial of company (Tong, Tao and Lifset,
2018). This firm follows hierarchical organisational structure which is the combination of
functional and divisional structure. In that all decision of company is taken by top level
management team on the basis of goal, objective, mission and vision of firm. For this all
obligation and roles are delegates to mangers of various departments as well as authorities
to carry out them.