merits or dismerits of accounting for its user
Answers
Some of the advantages of accounting are Maintenance of business records, Preparation of financial statements, Comparison of results, Decision making, Evidence in legal matters, Provides information to related parties. Let us discuss the advantages and disadvantages of accounting in greater detail.
Advantages and Disadvantages of Accounting
Stakeholders of an entity want to know whether the entity is earning a profit or incurring losses. They also wish to know whether the capital investment in the business is increasing or decreasing during the accounting period.
Accounting is a mixture of art and science. Accounting is an art of recording, classifying and summarizing financial transactions in a significant manner and in terms of money.
Advantages and disadvantages of accounting
Advantages of Accounting
Maintenance of business records
Preparation of financial statements
Comparison of results
Decision making
Evidence in legal matters
Provides information to related parties
Helps in taxation matters
Valuation of business
Replacement of memory
Browse more Topics under Theoretical Framework Of Accounting
Introduction to Accounting
Functions of Accounting
Bookkeeping
Systems of Accounting
Accounting as an Information System
Role of Accountant
Accounting Concepts and Principles and Conventions
Accounting Standards
Accounting Policies
Classification of Accounting
Double Entry System
Rules of Debit and Credit
Accounting Equation
Maintenance of business records
It records all the financial transaction pertaining to the respective year systematically in the books of accounts. It is not possible for management to remember each and every transaction for a long time due to their size and complexities.