ACCT510-The three types and forms of Businesses are Service

ACCT510-The three types and forms of Businesses are Service

Subject: Business    / Accounting
Question

Please write 2 separate responses 250 words EACH minimum for each discussion point below. APA FORMAT.

1. The three types and forms of Businesses are Service, Merchandising and Manufacturing. Service businesses provide service to customers like Delta Airlines who provide transportation service or the Walt Disney Company that provides entertainment services. A Merchandising business sell products to customers they purchase from other businesses, like Walmart who sells general merchandise or Amazon who sells books, music, and videos. Manufacturing businesses use material to create products and then sell the products to customers. Companies like Ford Motor Company builds car, trucks and vans in-addiction, Dell Company builds computers.

Businesses make money by providing goods or services for profit. Profits are made after the subtraction of any material or cost of providing the goods or services. In-addiction, Stakeholders are investors who put money or resources into the business in hopes of making a profit.

2. Accounting can be defined as a system that measures and analyzes the economic information to be able to communicate it and allow educated judgment and choices by the users in relation to a business (Warren, Reeve, & Duchac, 2016). What is its importance?

For a business to achieve a good functioning in accounts and finances must have controlled factors that may guarantee its stability. Among these factors is accounting. In other words, the latter is of essential significance in securing and keeping up the monetary solidness of any plan of action of a business. Accounting has grown basically in light of business needs (Edwards, Hermanson, & Mater, 2011). Since the foundation of a business, it is important to establish certain guidelines to know at all times the economic status of the same. This data or information is made through reports or statements that permit you to see the conceivable outcomes that a business has, as far as expenses and advantages.

Once the importance of accounting in the business is established, it is vital to know how information is provided to users for decision making. Firstly, it is necessary to identify the type of user that is offered the information, to see the needs of the user and to prepare a report that is useful to him. These users can be divided into two groups: internal users (managers and employees) and external users (investors, creditors, customers, government). Accounting can be divided based on these types of users, ie, managerial accounting is responsible for providing sensitive information to internal users and is directly implicated with operational decisions of the business. While financial accounting is responsible for providing information to external users and is not directly implicated with the operational decisions of a business (Warren, Reeve, & Duchac, 2016).

As a result, accounting enables intelligent and strategic decision making. It also takes into account monetary consequences that a business might have as a result of this decision making. For this reason, accounting is the future in a business since it lessens vulnerability in organizations and settle on choices in light of something accurate.