Accounting Is The Foundation For All Of Business Essay

870 Words Mar 10th, 2016 4 Pages
Accounting is the foundation for all of business. Accounting is considered the language of a business, accounting sheds light on the company’s financials. Accounting can be divided into two subdivisions: managerial and financial. Managerial accounting has an internal focus. Financial accounting puts the focus on external users (Hicks & Hicks, 2014, p. 3). Managerial accounting is different from financial accounting because the accountant has to hide some of the figures and facts managers find. The accountant has to throw out some of the facts and figures when he creates the financial statements for outsiders (Black, 1976). Finance is built upon the foundation of accounting and it allows managers to make well-informed decisions in regard to the financial situation of a company. Finance encompasses the management of a company’s equity accounts, assets and liabilities (Hicks & Hicks, 2014, p. 27). The purpose of financial information, dealing with the outcomes of business enterprises, is to facilitate the decision process used by investors in determining their investment plans (Ohlson & Buckman, 1980).
The Bible says a lot about managing your finances, and generally advises that it is not a good thing to borrow money or get in a lot of debt. If you’re bogged down in debt, it’s hard for you to be in the position to help others. Being in too much debt can also lead to other things, such as worrying and stressing. Proverbs 6:1-5 says “My son, if you have put up security for your…

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