Introduction
Pops Restaurant, located in Arcadia, Oklahoma, is unique in that it uses an unusual roadside sign in the form of a bottle of soda. This bottle is constantly lengthening and is now 66 feet tall (Pops 66, 2022). It can be easily increased due to the exceptional level design where each layer can be added or removed. This object attracts many tourists to the restaurants that pass by along the highway. However, accounting plays an important role in any business because it contributes to its proper development.
Management
A financier or economist maintains management accounting, however, in many medium and small businesses, this functionality is handled by an accountant, which is an erroneous decision because management accounting plays a much more critical role than accounting. Management accounting considers the effectiveness of the application and the qualitative characteristics of accounting objects for the enterprise’s activities.
In both accounts, the stakeholders are the establishment’s owner and its visitors. The quality of service and customer satisfaction depend on the restaurant’s success and how well it pays off financially. An example of financial accounting for a company can be an annuity report that most corporations make public to show their financial stability to attract shareholders. An example of management accounting is the measurement of cost, budget, performance indicators, and cash flows. Management accounting is not intended for external use, as it is intended to help the staff and the owner make the establishment better.
Fundamental Accounting Equation
The basic accounting equation is Assets = Financial Liabilities + Owner’s Equity. In this equation, assets reflect the total value of the property the organization has and is in circulation. Financial liabilities reflect the financing of the organization’s assets by third parties, banks, the budget, and individuals, i.e., the number of its accounts payable. The owner’s capital characterizes the value of investments made in this organization by its owner.
This equation is a necessary business tool because it provides an opportunity to present the organization’s funds, operations, and results and their reflection in the financial statements. The cash position is the most crucial element for monitoring the financial situation because it shows the movement of money and can help identify the organization’s errors in past reporting periods (Semadi & Ariyanti, 2018). Calculating the cash position makes it possible to predict the movement of money, identify business trends, and understand when the company needs more finance.
Responsibilities of an Accountant in a Gas Station Restaurant
One of the main tasks of an accountant in Pops-type establishments is to keep records of the main cost item, such as the purchase of products. In addition, at the gas station, the accountant must monitor the payment of excise tax. The duties of an accountant in an institution similar to Pops are calculating the cost of products, inventory, cost of various services, and margins.
Three Types of External Reports
The three types of financial statements prepared by an accountant are the balance sheet, income statement, and statement of cash flows. These external calculations aim to attract investors to the company and show the public that there are no financial problems in the organization. A balance sheet’s purpose is to calculate a company’s total assets, liabilities, and equity. An income statement is created to analyze income, expenses, and overall profitability. The cash flow statement shows all the cash that a company receives. An example of external financial statements containing all of the above indicators would be the 10-K form that all large companies fill out.
Conclusion
The main aspects of financial work discussed in this paper greatly help to analyze the financial transactions in institutions and understand how competent management is. Reports are also an excellent way to convey information to potential sponsors and future clients. Accounting work is a vital element of any business that aims to make money. Moreover, in case of any discrepancies in financial indicators, the accountant can identify the problem and eliminate it.
References
Pops 66. (2022). Pops is the iconic destination and must-see landmark on Route 66 in Arcadia, Oklahoma. Web.
Semadi, I. P., & Ariyanti, M. (2018). The influence of brand experience, brand image, and brand trust on brand loyalty of ABC-Cash. School Of Economics & Business, Telkom University, Indonesia, 7(3). [PDF File]. Web.