Long Ans
what is acounting?define its objective.
Answers
Explanation:
ANSWER
Accounting is the process of identifying,measuring,recording and communicating the required information relating to the economic events of an organisation to the interested users of such information.The objectives of accounting are as follows
i) Maintenance of Records of Business Transactions-The primary objective of accounting is to maintain proper records of business transactions.In this way, it is used for the maintenance of a systematic record of all financial transactions in book of accounts.A proper and complete record of all business transactions are kept regularly with the help of accounting.
ii) Calculation of Profit and Loss-The owners of business are always interested in having an idea about the net results of their business operations periodically,i.e whether the business has earned profits or incurred losses.Thus, another objective of accounting is to ascertain the profit earned or loss sustained by a business during an accounting period.
iii) Presentation of the Financial Position of the Business - One of the objectives of accounting is to ascertain the financial position of the business concern in the form of its assets and liabilities at the end of every accounting period. A proper record of resources owned by business organisation (Assets) and claims against such resources (Liabilities) facilitates the preparation of a statement known as balance sheet position statement.
iv) Providing Accounting Information to its Users - The accounting information generated by the accounting process is communicated in the form of reports,statements,graphs and charts to the users who need it in different decision situations. As already stated, there are two mains user groups, viz internal users, mainly management, who needs timely information on cost of sales,profitability etc.
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Answer:
Accounting or accountancy is the measurement, processing, and communication of financial and non financial information about economic entities[1][2] such as businesses and corporations. Accounting, which has been called the "language of business",[3] measures the results of an organization's economic activities and conveys this information to a variety of users, including investors, creditors, management, and regulators.[4] Practitioners of accounting are known as accountants. The terms "accounting" and "financial reporting" are often used as synonyms.
Objectives of accounting in any business are; systematically record transactions, sort and analyzing them, prepare financial statements, assessing the financial position, and aid in decision making with financial data and information about the business.
The main object of Accounting is to ascertain the results of the financial transactions of a business concern.
Objectives of Accounting
We have identified 13 objectives that accounting
1. Identification and recording of transactions
The primary object of accounting is to identify the financial transactions and to record these systematically in the books of accounts. As a result, the true nature of each and every transaction is known without much exercise of memory.
2. Ascertainment of results
Every business concern is interested to know its operating results at the end of a particular period.
The amount of profit or loss for a particular period of a business concern can be ascertained by preparing an income statement with the help of ledger account balances of revenue nature.
3. Ascertainment of financial affairs
Ascertainment of debts-liabilities, property, and assets i.e. total financial affairs of an organization at a particular date is another important object of Accounting.
The balance sheet is the statement of assets and liabilities of concern at a particular date.
4. Keeping accounts of cash
Cash book is a prominent book of the books of accounts.
5. Control over assets and liabilities
For running a business successfully a businessman is to acquire various assets like land, building, machinery, etc.
He is to face various debts and liabilities like accounts payable, notes payable, loan, bank overdraft, etc. side by side with die acquisition of assets.
6. Controlling money defalcation and cost
Prevention of money defalcation through fraud and forgery and controlling the cost of concern are also the main objects of Accounting.
7. Providing economic data
Another noble object of accounting is to provide the concerned parties with all economic information preparing financial statements and reports etc. in time.
8. Helping tax fixation
Accounts prepared on the basis of accepted accounting principles in considered reliable to the income tax.
9. Determination and evaluation of policy
The object of accounting is to help the management in determining and evaluating the management policies in running the business successfully by supplying necessary, information, interpreting and analyzing the financial statements.
10. Testing the arithmetical accuracy of accounts
One of the main objects of scientific methods of accounting is to make sure that accounts have been kept in a proper way.
11. Acceptability to others
Banks or financial institutions are interested to know the accurate financial position of business concern for sanctioning loans.
12. Creation of values and accountability
The object of accounts maintained in an acceptable way is to create higher values among individuals and organizations and thereby creating awareness in preventing money.
13. Following legal bindings and prohibition
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