83106 unit 04 introductory presentation

OCR Level 3Cambridge Technicals in Business Unit 4: Business Accounting... Whatever size the business is, whatever product it makes or sells, however old or new it may be, every busines

OCR Level 3

Cambridge Technicals

in Business

Unit 4: Business

Accounting

Everywhere we look, we are confronted by businesses of

every shape and size imaginable

What is business

accounting?

From the giants of Ford, British

Airways or HSBC to the local corner

shop, driving instructor or your local

hairdresser

Whatever size the business is, whatever product it makes

or sells, however old or new it may be, every business will

require some form of accounting

What is business

accounting?

All businesses will have to account for their finances and their business activities

So, what exactly is business accounting?

Business accounting is

about knowing how much

money is in the business,

where it has come from, and

how it is being used

A manager presented with accurate accounting information will be in a better position to make more informed decisions.

So, what exactly is

business accounting?

Money comes from:

- Sales

- Investors

- Lenders

Money is used to:

- Pay costs

- Pay dividends

Money is also used to re-invest in the business

Understanding the purpose of these reports is

a useful management skill in all industries.

Why do we need to do it?

It is important to understand the purpose of business accounting, because business accounting reports are used by owners to make decisions.

These reports will be used to: record; monitor and measure; manage and communicate business information

Understand the

purpose of

accounting and the

categorisation of

business income and

expenditure

What will you learn?

After completing this unit you will:

Be able to prepare a cash flow forecast

Be able to review business performance

using simple ratio

analysis

Be able to prepare profit and loss accounts and balance sheets

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