FUNCTIONS OF ACCOUNTING
The followings are the main objectives and functions of accounting
1-Maintaining the Record: The primary function of accounting is to maintain a proper record of all the business activities from this record the summary statements are prepared to know the results of the business activities
2-Protection of Business Properties: The accounting record is maintained in a proper form the cash and other properties of the business are used according to set rules and procedure in this way, the fraud and misappropriation of the funds and assets are controlled.
3- Legal Requirements: The law of the state also requires the maintaining of proper record of all the business transactions This record serves a base for the preparation and submission of income tax wealth tax statements.
4-Communication of Results: The results of the business I.e., profit or loss statement and Balance Sheet is prepared, and in this way the information regarding the results of the business activities is communicated to all the interested parties.
PARTIES INTERESTED IN ACCOUNTING INFORMATION
The information communicated by the accounting is needed for following purposes.
1. Owners of the business want to know their results of activities i.e., profit and loss suffered and also the financial strength of the business.
2. The prospective investors and creditors of the concern are interested to know the probability and financial status of the business.
3. The employees want to know the stability, future prospects and scope of business.
4. The management needs various kinds of classified information for decision-making techniques.
5. Various government agencies are interested in firm's activities and incomes.
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main objectives of accounting
parties interested in accounting information
Maintaining the Record
Protection of Business Properties
Legal Requirements
Communication of Results
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