BCOM 1st Year Meaning And Scope Of Accounting Long Question Answer Notes
BCOM 1st Year Meaning And Scope Of Accounting Long Question Answer Notes : In this post you will get full information related to BCOM All notes Study Material Sample Model Practice Paper Examination Paper here you will find all the questions of BCOM 1st Year This website parultech.com is very helpful for all students.
LONG ANSWER QUESTIONS
Q.1. Discuss about the users of accounting and describe their information needs.
Ans. Accounting information is used by various persons. In addition to proprietors, such information is used by creditors, government, financial institutions and other
|Proprietor||Proprietor is the main user of accounting. Through accounts he ascertains operating result of his business. He uses accounting information to know amounts due to others and due from others.|
|Management||Management has to plan, control and execute. Accounting information is used for fulfilling various managerial functions. `|
|Suppliers of goods and services (Creditors)||Persons who supply goods and services to business on credit are interested to watch goods and liquidity position of the business. They have to ensure repayment capacity of the services business. They use accounting information for this purpose.|
|Banks and financial institutions||Banks and other financial institutions who provide loan to the business are interested to know credit worthiness of the business. At the time of granting loan, they study profit and loss account and balance sheet of the firm of previous years to know capacity of the firm to repay interest and principal amount.|
|Prospective investors||Persons who are interested to make investments in some company, may study annual reports (profit and loss A/c, balance sheet and other data) of the company before making final decision of investment. They may select the company in which investment is to be made by comparing past performance of these companies.|
|Government||Government uses accounting information for buying various taxes (income tax, sales tax, excise duty, etc). In the absence of accounting data, it is difficult to assess proper tax.|
|Customers||Customers who place orders and are dependent on a specific business organisation for their supplies have to ensure the capability of the firm to execute the orders. This can be done by studying accounts of that business organisation.|
|Employees||Employees use accounting information for various purposes. They can assess their salary increase and bonus by studying profitability of the business. If business is constantly incurring loss, they may decide to leave the organisation.|
|Regulatory agencies||Various regulatory agencies such as company law department, Reserve Bank of India requires information to be filed with them under law. By examining these accounting information, they ensure that concerned companies are following the rules and regulations.|
|Counts||In case of disputes regarding indebtedness, insolvency, etc. costs use accounting information and other related data as evidence.|
|Researchers||Research scholars who have undertaken research on any aspect of business activity, may use accounting information for the purpose of analysis. Accounting reports of various companies and of various years may be compared for this purpose.|