Accounting in Business Enterprises

Contents: Preface. 1. Introduction to accounting. 2. Accounting systems and process. 3. Ledger posting. 4. Subsidiary books. 5. Trial balance and rectification of errors. 6. Final accounts. 7. Single entry system of book keeping. Bibliography.

"One of the central economic problems of every economy is the allocation of limited resources among competing alternative uses. Considering it at the micro level, this problem affects the decisions of business entities, individuals and even the government. The primary purpose of any business activity is to earn profit. Due to scarcity of almost every type of resources, the business entities must decide whether to invest in stock of goods (or raw materials) plant and machinery, advertising, research and development or other alternatives. Managers of these entities are responsible for obtaining maximum advantage from the use of resources placed at their disposal. Thus they need accounting information to help them make decisions regarding the use of firm\'s limited resources. For example, a business enterprise engaged in the production of more than one kind of product must be aware of the cost of producing each type of product. The financial information would enable the management to decide whether or not certain products should be continued or whether certain products should be manufactured in greater quantities. Management can also determine from financial information when certain machinery is to be replaced; whether additional labour force be employed or some employees should be dismissed. In addition to business firms, individuals and non-profit entities tend to use accounting information for decisions concerning the investment of their limited funds. An investor attempts to analyse the accounting information to determine which company best meets his investment goals." (jacket)