Organization, Why need Accounting?|Kerala Financial Corporation Assistant Expected Questions

on Friday, October 18, 2019 in Accountacy, Financial corporation Assistant, kerala Financial corporation Assistant, kerala PSC, Kerala PSC Previous Question Papers

Kerala Financial Corporation Assistant Expected Questions|Organization, Why need Accounting?

Kerala Financial Corporation Assistant exam is conducted by Kerala PSC on 19 October 2019.Some Expected Questions on Accountancy are given below:

You can get the syllabus of Kerala Financial Corporation Assistant by clicking Here

You can get the MCQ Questions set 1 HERE

Read the Accountancy Basic Questions HERE
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What is an Organization?

Organisation

Organisation refers to a business enterprise, whether for profit or not-for-profit motive.

Depending upon the size of activities and level of business operation, it can be a sole-proprietory concern, partnership firm, cooperative society, company, local authority, municipal corporation or any other association of persons.

Who needs Accounting?-Interested Users of Information of Accounting

Accounting is a means by which necessary financial information about business enterprise is communicated and is also called the language of business.

Many users need financial information in order to make important

decisions.

These users can be divided into two broad categories:

internal users and external users.

Internal users include:

Chief Executive, Financial Officer, Vice President, Business Unit Managers, Plant Managers, Store Managers, Line Supervisors, etc.

External users include:

present and potential Investors (shareholders), Creditors (Banks and other Financial Institutions, Debentureholders and other Lenders), Tax Authorities, Regulatory Agencies (Department of Company Affairs, Registrar of Companies, Securities Exchange Board of India, Labour Unions, Trade Associations, Stock Exchange and Customers, etc.

Since the primary function of accounting is to provide useful information for decision-making, it is a means to an end, with the end being the decision that is helped by the availability of accounting information.

Why Accounting is important? Accounting is useful for whom?

Why do the Users Want Accounting Information?

• The owners/shareholders use them to see if they are getting a satisfactory return on their investment and to assess the financial health of their company/business.

• The directors/managers use them for making both internal and external comparisons in their attempts to evaluate the performance.

They may compare the financial analysis of their company with the industry figures in order to ascertain the company’s strengths and weaknesses.

Management is also concerned with ensuring that the money invested in the company/organisation is generating an adequate return and that the company/organisation is able to pay its debts and remain solvent.

• The creditors (lenders) want to know if they are likely to get paid and look particularly at liquidity, which is the ability of the company/organisation to pay its debts as they become due.

• The prospective investors use them to assess whether or not to invest their money in the company/organisation.

• The government and regulatory agencies such as Registrar of companies, Custom departments IRDA, RBI, etc. require information for the payment of various taxes such as Value Added Tax (VAT), Income Tax (IT), Customs and Excise duties for protecting the interests of investors, creditors(lenders), and also to satisfy the legal obligations imposed by the Companies Act 1956 and SEBI from time-to-time.

Also, Check;

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