What are the objectives and functions of accounting?
Answers
Answer:
Accounting facilitates the systematic management of the records of the transaction and other financial data. It gives an idea about the chances of profitability or failure or losses. The process assists the management by helping them to make the best decisions.....
Answer:
Objectives of Accounting
1.The functions of accounting facilitate the objectives of accounting. there are many objectives of accounting. For instance,
2.Accounting facilitates the systematic management of the records of the transaction and other financial data.
It gives an idea about the chances of profitability or failure or losses.
3.The process assists the management by helping them to make the best decisions. besides that, accounting ascertains the financial position of an organization.
4.It also helps in the evaluation of the employee and their working efficiency, in addition, communicating and spreading the accounting information to the user.
5.Accounting contributes the biggest to any organization by preventing fraud and prevents profit risks.
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Historical Functions
The historical functioning of accounting involves keeping accurate records of all the past transactions made in the business. This type of functioning of accounting includes:
1. Recording the financial transactions and maintain a journal to keep them all.
2. It is important to classify and separate the records and the ledger.
3. Preparation of brief summary takes place for quick reviews.
4. This type of accounting gives the net result other than just keeping the records.
5. The preparation of the balance sheet takes place to determine the financial position of the business.
6. The analyzed data and records are then used for other purposes.
7. The last step is to communicate the obtained financial information to the interested sectors, for instance, owners, suppliers, government, researchers, etc.
Managerial Functions
In an organization, the management committee looks for all kinds of decision making. To ensure that the decisions are smooth and beneficial for everyone, they do an evaluation of the past records provided by accounting. These are managerial functions. The five managerial functions of accounting are:
1. Formation of plans in addition to controlling the financial policies.
2. Besides that, a budget is prepared to estimate the total expenditure for future activities.
3. Also, cost control is made possible by comparing the cost with the efficiency of the work.
4. The accounting also provides the necessary information during the evaluation of employee’s performance.
5.To check for fraud and errors is what the workability of the whole procedure depends on.