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Introduction to Business Accounting: Key Concepts and Skills

Explore the fundamentals of business accounting, including income, expenditure, cash flow, profit & loss, and more. Enhance your financial management skills for informed decision-making.

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Introduction to Business Accounting: Key Concepts and Skills

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  1. OCR Level 3Cambridge Technicalsin Business Introduction to Unit 4: Business Accounting

  2. What is business accounting? Everywhere we look, we are confronted by businesses of every shape and size imaginable. From the giants of Ford, British Airways or HSBC to the local corner shop, driving instructor or your local hairdresser.

  3. What is business accounting? Whatever size the business is, whatever product it makes or sells, however old or new it may be, every business will require some form of accounting. All businesses will have to account for their finances and their business activities

  4. So, what exactly is business accounting? Business accounting is about knowing how much money is in the business, where it has come from, and how it is being used.

  5. So, what exactly is business accounting? Money comes from: - Sales - Investors - Lenders A manager presented with accurate accounting information will be in a better position to make more informed decisions. Money is used to: - Pay costs - Pay dividends Money is also used to re-invest in the business

  6. Why do we need to do it? Understanding the purpose of these reports is a useful management skill in all industries. It is important to understand the purpose of business accounting, because business accounting reports are used by owners to make decisions. These reports will be used to: record; monitor and measure; manage and communicate business information.

  7. What will you learn? After completing this unit you will: Understand the purpose of accounting and the categorisation of business income and expenditure Be able to prepare a cash flow forecast Be able to prepare profit and loss accounts and balance sheets Be able to review business performance using simple ratio analysis

  8. Thank you for using this OCR resource. Other OCR resources are available at www.ocr.org.uk To give us feedback on, or ideas about, the OCR resources you have used e-mail resourcesfeedback@ocr.org.uk

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