Financial Systems & Auditing Essay Example | Topics and Well Written Essays - 3000 words

Financial Systems & Auditing - Essay Example Ledger stores information needed for preparation of financial statements and final accounts. Books of original entry, also known as prime entry books where transactions are initially recorded, such books include sales journal, sales returns journals, purchases journal, purchase returns journal, cash book and general journal. Accounting or bookkeeping assumes vital and helpful role by creating the information for giving responses to numerous questions confronted by the users of accounting information. It gives information how great or terrible the budgetary state of the business is which products or activities have been productive (Singhvi & Bodhanwala, 2006:262). Bookkeeping is vital for a business entity because of the following reasons: - iii) As the business continues to grow, there is an expanded volume of business results in a huge number of transactions, and no business person is able to remember everything. With the help of accounting records, there is no need to remember various transactions (Demski, 2007:33). Apart from the cash flow statement the other accounts are always set on an accruals basis. This basis of accounting requires that the non-cash transactions be reflected in the financial statements for the period in which their effects are encountered and not in the one in which cash or money is actually received or paid. The accounts are often prepared on a going concern basis. This implies that the accounts are made on the assumption that the  organization  will continue to operate indefinitely or for the foreseeable future. The business has no intention to curtail their operation significantly. This concept helps a business to get long-term sources of finance or loans. It also shows the financial stability to the shareholders that will affect the prices of stock (Kolitz et al 2009:507). Because of many different ways of applying concepts, each entity must select the approach that gives the most reliable picture of the entity

Principles of Economics Research Paper Example | Topics and Well Written Essays - 1000 words

Principles of Economics - Research Paper Example Based on this research economics is about scarcity and choice. It is assumed that all human beings are rational thinkers hence would always choose to consume products that would give them maximum satisfaction or utility. Mankiw argues that rational people ‘systematically and purposefully do the best to achieve objectives given available opportunity.’ Given a choice among alternatives and with scarce resources, one would evaluate the benefits and costs of consuming an extra unit of a product and would only take a decision only if marginal benefit is greater than marginal cost. In this case, to solve the alcohol abuse problem, one has to consider marginal benefits and marginal costs derived from consuming an extra unit of alcohol and since excessive drinking has more costs than benefits, one would refrain from alcohol. The opportunity cost foregone by choosing to abuse alcohol is too high compared to satisfaction derived; money spent on alcohol can do many other things suc h as feeding the family, education for children, and investments among others. Besides, the person may have health problems thus adding to the costs. By considering all these factors, a rational person would refrain from alcohol abuse. Heyne acknowledges the role played by incentives in directing behavior. For him, rational people usually respond to incentives or are induced to act by them. Assuming alcohol abusers are rational, imposing taxes on alcohol substances would eliminate the problem. This would follow the law of demand which states that other things being constant, if the price of a good increase, the quantity demanded of the good decreases. Taxes have the effect of increasing alcohol prices and this would automatically mean that the abusers would desist from alcohol consumption or cut their consumption. Prescription Drug Effects on Demand and Supply of Other Products and Services Prescription drugs are drugs prescribed by a medical officer to a patient and are regulated b y legislation unlike the over-the-counter drugs which can be old to anyone. If a patient is under prescription drugs, he/she buys the drugs despite the price of the drugs. An increase or decrease in price of the drugs therefore has little or no effect on the quantity demanded by an individual (McCarthy & Schafermeyer, 2007). The drugs are provided by the National Health Insurance and have no close substitutes. The increase in price of the drugs thus affects all the sectors of healthcare industry such as patients and private insurers. Due to increased costs, the private insurers are forced to increase the cost of their services in case they have to offer such drugs and this may lead to low demand for their services. The patients are also required to get medical prescriptions before obtaining the drugs thus the demand for the medicine may be low compared to over-the-counter drugs. Use of prescription drugs also has an effect on demand for other healthcare services such as hospitalizat ion. The prescription drugs also affect supply of generic products as manufacturers have patents to supply the new drugs for some years. Elasticity of Demand and Supply The price elasticity of demanded which is percentage change in quantity demanded over percentage change in price shows consumers responsiveness to price changes. (McKenzie & Lee, 2006). It is an important consideration when analyzing the impact of a shift in supply and in determining if the firm should raise or lower its price. The supply curve is upward sloping showing a positive relationship between price and quantity supplied other things held constant. However, in long-run, those factors do change causing a shift in supply curve. Such factors include; input prices, technology, expectations and number of sellers in the market. For example, an increase in input prices such as labor would lead to a decrease in supply thus shifting the supply curve to the left. This