Unit 1 Overview of Accounting

1.1 The Purpose of Financial Reporting

The accounting system of a business records and summarises the financial performance/position of a business over/at a certain period of time. This information is crucial to various stakeholders of the business, who will analyse that information to make significant economic decisions. It is vital that these stakeholders have good quality information to be able to make good quality decisions.

·This information is recorded in books of prime entry.

·經濟信息記錄在原始記錄簿。

·This information is then analysed in the books of prime entry and the totals are posted to the ledger accounts.

·原始記錄簿中的信息匯總分析后過入到總分類賬戶中。

· This information is summarised in the financial statements.

·最后匯總信息并編制財務報表。

1.2 Financial Accounting and Management Accounting

1.2.1 Financial Accounting

Financial accounting is mainly a method of reporting the results and financial position of a business. It is not primarily concerned with providing information towards the more efficient running of the business. Although financial accounts are of interest to management, their principal function is to satisfy the information needs of persons not involved in running the business. They provide historical information.

財務會計是企業報告經營成果和財務狀況的一種方法。

財務會計提供歷史信息。

1.2.2 Management Accounting

Management（or cost）accounting is a management information system which analyses data to provide information as a basis for managerial action. The concern of a management accountant is to present accounting information in the form most helpful to management.

管理會計是企業管理信息系統，為企業的管理活動分析并提供數據信息。

The information needs of management go far beyond those of other account users. Managers have the responsibility of planning and controlling the resources of the business. Therefore they need much more detailed information. Thus management accounting is an integral part of management activity concerned with identifying, presenting and interpreting information used for：

·formulating strategy；

·制定戰略；

·planning and controlling activities；

·計劃并控制經濟活動；

·making decision；

·決策；

·optimising the use of resources.

·充分利用經濟資源。