Strengths And Weaknesses Of Financial Accounting
Course: Bachelor of Science in Business Management (BSc MGT/Sri Lanka)
Module: Financial & Management Accounting (ACC2002L)
Assignment Title: Fundamental concepts in Financial Accounting and Management Accounting
Submitted by: Ahamed I R A
Student Number: 16210255
Lecturer: Dr. Ming Yen Tan
Submission Date: 19th January 2017
Word count: 818
Question 1
Explain the strengths and weaknesses of these kinds of business ownership: sole proprietorship, partnership and limited company.
Business is a place where making, buying and selling goods and providing services in exchange of money. These businesses have types of ownerships and they are sole proprietorship, partnership and limited company.
Sole proprietorship
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Strengths of a partnership business are, the capital used to the business if high comparatively to a sole proprietorship business because more partners means more capital. Another strength is very successful decisions can be made because by discussing with partners a very good decision can be made. Another strength is if the business gets any losses the loss is divided among the partners so a person no need to bare a huge loss.
Weaknesses of a partnership business are, when making decisions fight may arose among partners because some partners may not like the decisions of others decisions. Another weakness is the profits are divided among the partners because more the partners less the amount of profit get by one partner. And another weakness is if a partner did something wrong every partner becomes responsible for the act of that partner.
A limited company is a business which held on its own rights, meaning the finance of the business is separate from the finance of the owners. A strength of limited company is a large amount of capital is been invested. Another strength is the liabilities are limited and the limited liabilities divide among the
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Another weakness is fights arose among the director board when making decisions.
Question 2
Discuss 4 main distinctions/ differences between Financial Accounting and Management Accounting.
Accounting is a process of identifying, measuring and communicating financial information for the purpose of decision making. There many types of accounting and main are financial accounting and management accounting.
Financial accounting is concerned on providing information to the external users of accounting information to discharge stewardship.
Management accounting is concerned on providing information to internal users of accounting information for planning, controlling and decision making process.
There are differences between financial and management accounting and they
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