write 4 objective of accounting
Answers
Answer:
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.
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Answer:
1. Systematic Recording of Business Transactions:
A systematic and complete record helps the management to receive any retrieve information easily and in time. However, in every business there are numerous business transactions and it is not possible for the management to keep in their mind all business transactions. Accounting records all business transactions in books of accounts in such a manner that intended users can use the information for different decision making purposes.
2. Ascertainment of Results:
The main purpose of any business is to earn profit. For the ascertainment of profit earned or loss sustained by the business enterprise, all incomes and expenses are to be worked out and presented in a separate statement which is called Manufacturing, Trading and Profit & Loss Account.
When total expenses are less than the total income of the business concerned, it results in ‘profit’ and when total expenses exceed total income, it leads to ‘loss’. This information can be used for taking effective measures for cost control.