1. Types and Characters of Companies
In general, a company (business) is an organisation where resources (inputs), such as raw
materials and labour are processed to produce goods or services (outputs) for customers.
The company's customers can be individuals or other companies that buy goods or services
in exchange for money or other valuable goods.
The goal of most companies is to maximise profits. Profit is the difference between the
amount received from customers for goods or services produced and the amount spent to
purchase natural resources to produce those goods or services. However, there are also
companies whose goal is not to maximise profits, called non-profit companies.
Based on the characteristics of the type of business, there are two types of companies:
โService Company
The characteristic of service companies is that the products offered are not in the form of
goods that can be seen, but in the form of services that can provide satisfaction for
customers.
โManufacturing Company
The characteristic of manufacturing companies is to convert basic inputs into products that
are sold to individual customers.
2. The Role of Accounting in the Company
The role of accounting in a company can be considered important because accounting can
provide information about describing the financial picture in a company. Accounting is part of
an information system that produces relevant financial reports. Accounting has a very
important role for internal and external parties of the company, namely:
๎ Manager
The role of accounting for managers is to evaluate the company's achievements and make
corrections based on the financial information.
๎ Creditors
The role of accounting for creditors is as a basis that determines whether the company is
able to return the principal loan or not.
๎ Financial Institutions
The role of accounting in financial institutions is to provide information about the company's
ability to fulfil employee rights.
๎ Government Agencies
The role of accounting here is the basis for determining the tax rate applicable to the
company.
๎ Non-Profit Organisation
For non-profit organisations, accounting is a tool to obtain financial information for future
planning and development of the organisation.
3. Usefulness of Informations to Users
Accounting information presented in the form of financial statements has usefulness for
various parties:
a. As a planning tool, control of company activities and a basis for decision making for
leaders
