Accounting is an art as well as science. Art is the technique which helps us to achieve our desired objectives.Therefore it helps us in know about the profitability and financial position of the business. Accounting is also a science as it is an organised knowledge based on certain basic principles.
- Record of Financial Transactions and Events: It is important to keep up orderly records of each business exchange, accordingly it is past human abilities to recall such enormous number of exchanges.
- Decide Profit or Loss:Business is raced to win benefits. Regardless of whether the business earned benefit or acquired misfortune is found out by bookkeeping by getting ready Profit and Loss Account or Income Statement. An examination of salary and consumption gives either benefit or misfortune.
- Decide Financial Position: Financial articulations demonstrate the money related situation of a business. Monetary position mirrors the money related state of a business around then.
- Assisting the Management:Systematic records helps the administration in powerful basic leadership, proficient control on money the board approaches, getting ready spending plan and guaging, and so forth.
- Communication Accounting Information to Users:It is give bookkeeping data to clients who break down them according to their individual necessities.
- Protecting Business Assets: Accounts is to have records of advantages possessed by the business. Records keep up record of benefits possessed by the business which empowers the administration to secure them and exercise control.
- Maintaining systematic accounting records:The as a matter of first importance capacity of bookkeeping. The orderly record keeping of the money related exchanges, all the time.
- Preparation of financial statements: Financial articulations contain significant money related information. The readiness and detailing of fiscal summaries are administer by sound accounting standards.
- Meeting legal requirements: The bookkeeping articulations must be readied remembering the consistence with the pertinent laws.
- Communicating the financial data:Likewise, impart the money related information to clients, which might be inward clients or outside clients.
- Assistance to management:Management regularly requires data past the data passed on by the money related information. Thusly bookkeeping records ought to be keep up in such a way. The data ought to by the administration is accessible which in term helps in basic leadership.