1. The users of accounting information are

1.      The
users of accounting information are the way to help users can make a good
decision in financial sector and understand their financial condition. In fact,
the users of accounting information can separate into two types of users which
is internal users and external users. Internal users are for primary used for instance,
directors, managers and employees. Directors need to analyse and evaluate their
business organisation’s financial condition in the way of making profit and
financial position. Manager need to plan the best way and motivate employees to
give company get a huge profit in order to avoid facing financial loss.
Employees are desire to get the bonus at the end of the year which need to base
on the company’s profitability in the whole year. There is the reason why the
employees are interested company’s financial condition.

 

For external users are the secondary
users of accounting information for example creditors, investors, Unions,
public and government agencies. Creditors are very interested to some
companies’ financial statement because they can extend credit for product
accordingly and identify the capability of companies when come to debt.
Investors are extremely interested to prosperity of this enterprise, this is
because they want to know clearly that the entity’s profitability of the
enterprise and the financial growth of the enterprise. As investors are not
always involved their daily operation, so they can get financial statement for
next investment. Government agencies will give the financial help to the
industry by identifying the process. Not only that, sometimes the government
agencies will refuse to lend the hand to some industries because they may using
unfair and unethical way to carry out the trade.

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2.     
Accounting is an information system that
provides quantitative, financial information to stakeholders about the economic
activities and condition of a business so that they can make business or
economic decision. From the past decades, accountancy has branched out into few
different types of accounting for instance financial accounting, auditing,
taxation, cost and management accounting, forensic accounting and government
accounting. Financial accounting is an accounting that involved in recording
and classifying each businesses’ transaction, using various measurement to
present a financial statement used by external users. Furthermore, auditing is the
process that reviewing and investigating the any aspect of the financial
statements. Auditors are trained to spot the problem where occurs in the
financial statement for example some unethical behaviour as embezzle funds.
Besides, taxation. In taxation, the tax accountants are responsibilities to
help client for calculating the individual taxes or taxes in business.

Moreover,
cost and management accounting considered as subset of management         accounting and cost accountants need
to analyse actual and standard cost to solve the complicated costing problem.
Meanwhile, managerial accountings involve financial analysis, budgeting, cost
analysis and so on. The latest and popular branch of accounting which is
forensic accounting. Forensic accounting is involved the application of
knowledge, court, and some litigation cases. Last but not least, government
agencies are also one of the types accounting. Government agencies is public
sector accounting which includes accounting for legislative bodies and
government department.

 

 

 

 

 

 

 

 

3.     
In business entity, sole proprietorship
and partnership is quite popular. Although they are popular and useful in
business sector, but it also contains pros and cons in both. Firstly, strength
of sole proprietorship is can formed it easily, dissolve and incorporation
cost. Not only that, sole proprietorship can make you enjoy the profit solely
as there no need to share with others. Moreover, the owner has full authority
to run the business and not many regulations to adhere to. Besides, it does not
depend on other people due to it owned by only one individual. Then, sole
proprietorship is no need to charge with special income tax.

 

On
the other hand, there are also have some weaknesses in sole proprietorship which
is it is financial liability. In sole proprietorship, the owner and the
business are legally inseparable, which gives the proprietor unlimited
liability. Furthermore, resource limitations. Because they depend on a single owner,
sole proprietorship usually has fewer financial resources and fewer ways to get
additional funds from lenders or investors. Then, no employee benefits for the
owner. Moving from a corporate job to sole proprietorship can be a shock for
employees accustomed to paid vacation time, sick leave, health insurance and other
benefits that many employers offer. Last, limited life span. Although some sole
proprietorship pass their businesses on to their heirs, the owner’s death may
mean the demise of the business.

 

The
strength of partnership is it can be formed easily. Normally, partnership has
two or more individuals which called partners and who are co-owners of a
business for profit. Then, single layer of taxation. Income tax is
straightforward for partnership. Profit is split between or among the owners
based on whatever percentages they agreed to. Furthermore, cost sharing. An important
financial advantage in many partnerships is the opportunity to share the costs.
Moreover, more skills and knowledge. By forming the partnership, you will
slowly increase the skills and knowledge together with your partner. Besides,
partners can work together for the benefits of the company. For earning more
profits and benefits, partners will work harder and be ambitious to reach the
target.

 

On
the other hand, there are some weaknesses in partnership. Firstly, unlimited
liability. All owners in partnerships face the unlimited liability. The risk
will be greater because has many people making decisions. Furthermore, profits
sharing. In partnerships, all the profits need to share with others in business
venture. Besides, conflict and misunderstanding. In partnerships which mean it
have more than two bosses. When it have more bosses which mean more disagree over
business strategy or even the division of profits and losses. Then, expansion,
succession and termination issues. Partnerships need to consider how they will
handle the issues such as expanding by bringing in additional partners, replacing
partners and so on.

 

4.     
To run out a business, you need data, record,
analysis on the information of debts, losses, profit that is the reason why
accounting is very significant and necessary in business. The analysis of information
is very important to give the management making decision, understand their
companies’ financial condition and economic activities. The management can’t make
a decision without a reasonable prove or information. Accounting is a process
to let management understand their financial position, losses or profit, liability
or assets and so on. Not only that, the purpose of accounting is planning how
to use the money, recording accounting data, keeping specific records or
information and use accounting to make a decision. Obviously, accounting plays
an important and significant role in business area.