What is Accountancy and Main Purpose of Accountancy for a Business?

Articles and notations are combined with two words in the accounting by writing the meaning of the article and by marking means the meanings. Accounting is an event sequence that is written in the digits.

In order to achieve a particular goal, the process of writing incidents in the digits is called accounting. Here, the meaning of the events involves all the actions in which exchange of money is done.

In simple words, accounting is meant to account for financial transactions in order to classify, classify, summarize and present them in such a way that they can be analyzed and interpreted. The meaning of summaries in accounting is by making the plumbing and the basis of analysis and interpretation is the final accounts, under which the trade account, profit-loss account and chitta / status details or balance sheet are prepared.

Examples

Many times the item is bought in a business, it is often sold. The expenses also continue to occur, the amount of money spent on it, the total amount spent, how many people have earned and how much profit or loss it is, in order to achieve all this information, the practitioner writes incidents in the same way lives. This type of writing is called accounting. So writing financial transactions of business is only accounting.

In the initial actions of accounting, the following three are included:

Recording:

The action of writing the transaction for the first time is called recording. Recording is called daily, meaning journal is also called.

Classification (Classification):

The action of writing written items divided into different parts is called classification. Classification is also called an account (Ledger).

Summarizing:

The action of classified items being written in one place is called condensation. The condensation is also called the trial balance.

As well as increasing the size of the business in the modern era, the complexity of the business has also increased. Business relates to many customers, suppliers and employees and therefore there are hundreds, thousands or millions of transactions in the business world. All transactions happen. It is difficult and impossible to remember all the transactions in detail. We want to know the benefits of business and also want to know how much of its assets are, its liabilities or liabilities, how much is the capital etc., etc. Information about all these things requires accounting. If you’re required a best Tax consultant in dubai then visit given link.

Main Purpose of Accountancy

• The first purpose of accounting is to complete and organize all business transactions. Taking the account in a systematic way is not likely to forget and the results get purified.
• The second purpose of accounting is to find out the profit-loss of a certain period.
• One purpose of accounting is to get information about the financial position of the institution.
• One of the tasks of accounting is to provide financial information to facilitate managers to make decisions, as well as to make the right decisions. Optional solutions for this also provide an accounting.
• There are interests of many parties in the business, such as staff members, managers, creditors, appointee etc. It is also a purpose of accounting to provide information related to the various parties having an interest in the business.

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