Responses U1
Learning Goal: I’m working on a business discussion question and need an explanation and answer to help me learn.
There are 8 responses. Write a 75–100-word response to each person for each one.
Response Q1:
1.) Tomeka
Discuss the importance of accounting and how, as a manager, you use accounting data in the decision-making process.
Accounting is vital in everything we do that involves money. It gives a painted picture of our finances to help us understand and make better financial decisions. That’s why it is vital to be honest with ourselves regarding our finances. For example, can we afford certain investments? And, our monthly reconciliations bring awareness to areas of overspending so we could make better future decisions.
Financials are critical in daily decision-making and future planning as a nonprofit director. Such as to know in comparison to previous years,
how many events are needed to have a better fiscal year-end,
how much money do you need to raise throughout the year,
which events were successful to know whether to do them again,
could we afford to give raises to our employees, or to see if we can hire additional employees,
the rate of return on grants received because some do not provide the total amount of funds requested.
I share truthful information with our board of directors to keep them informed of business practices and decisions, in addition to having an outside certified accounting firm complete a year-end audit review.
2.) Eric
The significance of accounting is vital to any organization. It helps institutions to be able to establish the financial situation of the organization. Also, accounting helps classify, record, measure, and summarize business transactions and reports in the company. Using these accounting data can help management decide which path to take to align with the business goals. If the accounting data shows positive transactions, it will ignite the business to run efficiently and effectively. The management then will make the right decision due to the adequate flow of accounting activities in the business.
Response Q2:
1.) Michael
Managers need timely accounting reports to make decisions (Wild & Shaw, 2019). It is very common for organizations to have annual reports and most organizations produce quarterly, monthly, and daily reports. Managers can use these reports to make decisions about staffing levels, sales goals, supply orders, and many other decisions that are critical to the viability of the organization. For example, if call volumes to a customer service department increase and wait times exceed customer expectations, a manager may need to add staff to that department. Timely reports of call volume transactions are needed to adjust staffing levels timely and satisfy customers.
Managers need consistent measurements over similar time periods (e.g., months) to make comparisons and measure trends. Accrual accounting is a system of measurement that recognizes financial transactions when the service is received and the expense is incurred (Wild & Shaw, 2019), even if the exchange of money occurs in a different period. This creates more consistency across time periods when reviewing financial reports.
Wild, J. J., & Shaw, K. W. (2019). Financial & managerial accounting: information for decisions (8th ed.). McGraw-Hill Education.
2.) Jayne
Periodic reporting determines an organization’s past and current performance and present stability for a given month, quarter, or year. (Wild and Shaw, 2019) explained that yearly reports are known as annual financial statements, and reports divided into periods are interim financial statements. Knowledge of a company’s performance before venturing into another financial endeavor can be instrumental to the organization’s success. And decide the path necessary to improve or maintain objectives.
Accrual accounting enables the manager to see monthly expenses paid in bulk but reflects costs over time. For example, insurance installments or the monthly depreciation of equipment purchases.
Response Q3:
1.) Mary
The statement of cash flow is to give information on cash payments, cash receipts and what is the net remaining change in cash from operating, investing, and financing opportunities for the business during a period of time. It provides a report on what cash options are available and on hand for the business and shows the investors just how effective the business is at utilizing the resources and assets and how it uses its assets to collect cash from sales and customers.
2.) Deborah
Cash flow measures cash inflows or cash outflows. The importance of measuring cash flow helps users decide if a company has the cash to pay its debt. Cash flow also helps the users evaluate the company’s ability to pursue unexpected opportunities. Measuring cash flow helps managers plan day-to-day operations. Measuring cash flow also helps managers make long-term investments.
The importance of cash flow on the ratio of the total assets shows investors how efficient a company is at generating cash from sales and customers.
Reference: Unit 1-Chapter 12, Reporting Cash Flows PowerPoint
Response Q4:
1.) Carter
God commanded through Zechariah the prophet that “These are the things that you shall do: Speak the truth to one another; render in your gates judgments that are true and make for peace;” (English Standard Version, 2001, Zechariah 8:16). When reflecting on this scripture in relation to accounting tenants, the generally accepted accounting principles (GAAP) come to mind. Specifically, the GAAP’s emphasis on “relevance and faithful representation” (Wild, 2022). The scriptures are filled with God stressing the importance of truthfulness (English Standard Version, 2001, Ephesians 4:25; Proverbs 12:19, 12:22). Tight internal controls and periodic audits can be important tools in ensuring the faithful representation of organizational records.
Currently, in the United States, secular society also demands truthfulness in accounting processes. As with all secular principles, this concern for the truth may change as social norms change for a particular time and place. Postmodernists are not concerned about the truth and may doubt that truth exists. I would encourage anyone with strong postmodernist convictions to avoid the field of accounting.
English Standard Version. (2001). Crossway.
Wild, J. J., & Shaw, K. W. (2022). Financial & managerial accounting: Information for decisions (9th ed.). Mcgraw Hill.
2. Michael
The passages of Scripture referenced in the syllabus collectively identify God as the sovereign ruler of all creation that is the source of justice, righteousness, goodness, and strength. People are created to submit to His authority and seek His truth. Yet, all people are sinners and experience the deceitfulness of the flesh. But God, in His grace, provides the antidote for sin through His Son Jesus Christ. Those that trust Jesus Christ and seek wisdom and truth in the Scriptures are able to know and do what it true and right.
One of the foundational tenants of accounting is ethics, that is, doing what is true and right. Accounting records must be accurate and true so that an organization’s owners, customers and other stakeholders will trust the financial reports and support the success of the organization. A Christian should be motivated to do what is true and right in accounting because their authority, God, expects this conduct in all aspects of a Christian’s life. Yet, because Christians are sinners, it is wrong to assume that Christians will always do what it right in accounting.
A postmodernist in our secular society does not believe in any universal objective truth in life (Myers & Noebel, 2016). Postmodernists believe that ethics vary from one people group to another, which could make it challenging to compare accounting records from organizations in different cultures. Secular society pushes for moral relativism or utilitarianism. These priorities could lead managers to commit fraud by being able to justify their actions through their philosophy. A secularist could use a utilitarian viewpoint to justify under-reporting income to reduce taxes. This person may believe that the greater good of having additional cash to retain more employees is enough to justify a fraudulent tax return.
English Standard Version. (2001). Crossway/Good News Publishers
Myers, J., & Noebel D.A. (2016) Understanding the Times (2nd ed. pp. 2-5). Summit Ministries.
Image preview for”discuss the importance of accounting and how, as a manager, you use accounting data in the decision-making process.”
APA
777 words