In every business entity, HI5020 corporate accounting and financial accounting concepts are important for the management of finances. Corporate accounting is a b4ranch of accounting that deals with accounting for companies. This involves the preparation of financial accounts, cash flow statements, analysis, and interpretation of financial results. It also includes accounting for specific events such as amalgamation, absorption, and consolidation of balance sheets. Financial accounting is the process of recording, summarizing, and reporting a company’s business transactions. It, therefore, involves the use of income statements, balance sheets, and cash flow statements. Consequently, financial accounting concepts are conceptual issues that help an individual to firmly understand how accounting works.
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ADVANTAGES OF HI5020 CORPORATE ACCOUNTING
HI5020 corporate accounting has several advantages. First, the shareholders of the corporation have limited liabilities therefore they suffer less during losses within the company. Secondly, the corporate entity can raise its amounts by selling shares and issuing bonds. This, therefore, helps to increase the amount of capital that enters the company which could therefore bring in more profits. Thirdly, corporate company holders can easily transfer their ownership to other individuals. Fourth, with the help of financial accounting concepts, the owners can receive tax-free benefits from the company. Lastly, since the ownership of a corporation is transferable, it has a perpetual life.
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FUNDAMENTAL FINANCIAL ACCOUNTING CONCEPTS
There are five fundamental financial accounting concepts. These are; business entity, money measurement, going concern, materiality, and dual aspect. The business entity concept separates the business from the owner. Therefore helps the accountant to identify business transactions from personal ones. Money measurement is a concept in which only financial transactions have a place in accounting. This is therefore important for HI5020 corporate accounting. Thirdly, going concern is a concept that assumes that the business will operate for an indefinite time. Furthermore, the materiality concepts, states that all material facts must be part of the accounting process. Lastly, the dual aspect which is the heart of accounting states that for every credit, there must be a corresponding debit.
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