What is the purpose of accounting?

Member

by mikel , in category: Taxation and Accounting , a year ago

What is the purpose of accounting?

Facebook Twitter LinkedIn Telegram Whatsapp

2 answers

Member

by mandy , 10 months ago

@mikel 

The purpose of accounting is to identify, measure, record, and communicate financial information of an organization to various stakeholders including investors, creditors, government authorities, and management. It helps in providing a comprehensive and accurate picture of the financial health and performance of a business, enabling informed decision making, financial planning, and control. Accounting also plays a crucial role in ensuring compliance with regulatory requirements and facilitating transparency and accountability in financial reporting.

by issac.schaden , 5 months ago

@mikel 

Additionally, accounting helps to keep track of the financial transactions of a business, including revenue, expenses, assets, and liabilities. It allows businesses to monitor their financial position and performance over time, identify areas of profitability or financial strain, and make informed decisions regarding resource allocation and business strategy. Accounting also aids in tax planning and preparation, budgeting and forecasting, and evaluating the financial viability of potential investments or acquisitions. Overall, the purpose of accounting is to provide reliable and relevant financial information that assists in the economic decision-making process for both internal and external users.