Operational rules for financial management, Financial Management

Assignment Help:

Operational Rules for Financial Management

Besides features, certain operational rules are established as to the subsequent:

1) While revenue and expenses are reported;

2) How expenses are matched to revenue;

3) What to do whenever a choice could be made that might overstate or understate figures; and

4) What type of information should be disclosed so that the reader will fully understand the circumstances under which the information is being presented?

5) There are also basic assumptions upon which the reader could rely, such as:

6) The information is associated to the business entity only and doesn't have any unrelated information mixed in,

7) The business is a going concern & won't cease operations soon;

8) The financial information presented is measured in exact time intervals such as a month, quarter or year. The financial information is using a certain unit of measure such as Dollars, Rupees, Pound, etc.

9) The particular information is presented at historical cost, i.e., while received, paid, or incurred; and

10) The technique of accounting being used is double-entry and not some other method.

One of the basic reasons of accounting is to give financial information about a business enterprise to several users of accounting information for decision making purpose.The user of accounting information widely uses the information for the purpose of assessing profitability, financial position and actual performance, investment decisions credit, assessing taxes, decision, protecting investors and public interest, setting economic policies, measuring social & environmental protection programmes and negotiating labour agreements.


Related Discussions:- Operational rules for financial management

Determine the meaning of reportable segments, Determine the meaning of Repo...

Determine the meaning of Reportable segments Reportable  segments  are  operating  segments  or  aggregations  of  operating  segments  which meet specified criteria(core princ

Explain the meaning of compound interest compounded yearly, $7000 are inves...

$7000 are invested at 5% per annum compound interest compounded yearly.  What would be the amount after 20 years? Solution Here i = 0.05, P = 7000, and n = 20. Putting it i

Establish ground rules for the study and design phases, Question : One ...

Question : One activity of the study phase is: "Establish Ground Rules for the Study and Design Phases". (a) What are ground rules? (b) When developing ground rules for a

Types of rating - individual/borrower rating, Individual/Borrower Rating ...

Individual/Borrower Rating This includes rating a borrower to whom a loan/credit facility may be sanctioned.

Types of companies likely to have high operating leverage, Give two example...

Give two examples of types of companies likely to have high operating leverage.Find examples other than those cited in the chapter. Long distance electricity generating compani

Revenue bonds, Revenue bonds are the securities issued for financing ...

Revenue bonds are the securities issued for financing an entity for general      public-purpose. The securities issued for entity financing are backed up with the

Companies that would be best able to handle high debt levels, Give two exam...

Give two examples of types of companies that would be best able to handle high debt levels. Companies that manage local telephone service and those that manage natural gas deli

Need for working capital, Along with the fixed capital nearly every Small-S...

Along with the fixed capital nearly every Small-Scale industries requires working capital though the extent of working capital requirement differs in different businesses. Working

Risks associated with short-term financing working capital, What are the ri...

What are the risks associated with using a large amount of short-term financing for working capital? Using a large amount of short-term financing in general allows funds to be

Exam help, You plan to borrow $125,000 at a 9.5% annual interest rate. The...

You plan to borrow $125,000 at a 9.5% annual interest rate. The terms require you to amortize the loan with 10 equal end-of-year payments. How much interest would you be paying i

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd