the accounting function in informing decision making and meeting stakeholder and societal needs and expectations

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Authors: Thu Trang & Hoang Anh



The main functions of accounting are to keep an accurate record of financial transactions, to create a journal of expenditure, and to prepare this information for statements that are often required by law. The most basic of accounting functions is to record the data.
The analysis of the recorded data is noted in the ledger book, which is simply a summary of the journal. Entries of a certain nature are all grouped here. So, if you want to look at how much money has been spent or received on maintenance, for example, you are likely to find the information here.
 

1. Balance Sheet

The balance sheet summarizes the financial balances of a community association or management company at a given point in time. This includes assets, liabilities, and ownership equity.

2. Income Statement

The income statement (also known as a profit and loss statement) shows the revenues and expenses across a certain quarter, month, year or period selected. This statement shows managers and homeowners whether the association made or lost money during this time period.

3. Cash Flow Statement

The cash flow statement breaks down an association’s income and expenses into an itemized list. In a homeowners or condo association, the income will almost exclusively come from homeowner assessments (dues). However, the cash flow statement shows exactly where the association’s money goes, item-by-item.

The final function of accounting is to analyze and interpret these figures so that external parties can see the profitability of a community association.




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