Question -
Answer -
Data manipulated and processed in a way that is grasped by user without any complexity becomes information. This information is further refined to create a report. Content and the report design depends upon the management level in which it gets submitted. Decisions are taken on the basis of the reports prepared. An accounting report must fulfil the following criteria:
1. Accuracy
2. Relevance
3. Completeness
4. Timeliness
5. Summarisation
Following types of reports are seen in accounting
1. Demand Reports: These are the reports that are prepared on the managements’ need and request. Money report. Eg: Money report.
2. Summary Reports: Reports which summarise the activities happening in an organisation. Example, Profit and Loss Account.
3. Customer/Supplier Reports: Reports prepared as issued by management detailing various information of suppliers. Example: Report of 5 best customers.
4. Responsibility Reports- Reports prepared by managers responsible for individual departments. Example, Purchase Manager submits a report regarding different aspects of purchase.
5. Exception Reports: Reports prepared with a purpose containing conditions and exceptions. Inventory Status Report.