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Preparation of Final Accounts

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For any business organisation it is of prime importance that the accounts should be maintained in a systematic and proper manner, since, on its basis company’s welfare is dependent. Most importantly, such information needs to be placed before management of any company on basis of which certain managerial decisions will be taken.

The soundness of management of an organisation is specifically dependent on availability of certain information and that too with people of managerial position. Thus, it can be said that managers, owners, creditors, investors and employees have an important role in ensuring that accounts that are prepared and presented have credibility and can be used on immediate demand!

Entities associated with preparation of accounts:

  1. Managers:

As the very name suggests, his primary function happens to check out what rates of profit canbe managed against a certain monetary investment given that profit rates of shareholders are not compromised in any manner.

It is of utmost importance that every financial data associated with a company should be at the fingertips of the manager and hence, having systematic accounts helps in bettering decision making. A manager needs to have data on the expenses and assets of a company, amount of money flow in a company and business decisions based on that.

  1. Owners:

They are the primary suppliers of capital that is used for carrying on business transactions. Having proper account details helps them determine course of action in regards to their business and take decisions in regards to prospects by evaluating the past.

  1. Potential Investors:

For any investor, it is very important to note whether a particular organisation is getting required profits before he or she makes an investment into that organisation. Hence, for potential investors having a detailed view of the accounts and its solvency position is of prime importance for an investor.

  1. Creditors:

Since depending on amount of profit creditors place their money, hence it is important that creditors should know profit making capacity of a particular company, its long-term financial goals and nothing can be better than an accounts report of that company.

  1. Regulatory Agencies:

In order to maintain a sense of security and ensure that public is saved from any fraudulent activity, there are a number of regulatory agencies that keep track of company accounts for tax assessments and checking well-being of a business account.

  1. Public:

As consumers it is imperative that public should know whether proper control is executed on factors of production and production aspects on the whole. Also, it is important for them to know whether ideal utilisation of factors of production are made and how a company is faring when placed in regards to that. This would also depict those factors that are harmful for any business organisation.

  1. Government:

Being the sole party to develop economic development in the country, it is of utmost duty of the government to ensure that a particular production unit is working as per its standards. By getting financial and accounts statements of a particular unit, a government would be able to check out what the actual financial position of that company is and how good it is for a particular economy.

Also, taxes and other cess that are to be imposed is to be based on this accounts. Finally, details of this account are to be taken up for national income accounting.

  1. Employees:

For any organisation, employees are the backbone. Their interest in accounting happens to be very natural since their salaries, bonus and other monetary schemes are exclusively dependent on a company’s accounts performance.

  1. Research Scholars:

For a scholar researching on accounts and other related topics, these accounts charts are a great option for providing first-hand data. Based on this data, certain conclusions can be reached and data can be provided for thesis.

Thus, with these categories specifically, having a detailed accounts reports is of utmost importance. Hence preparation of final accounts need to be done in a proper manner.

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