Understanding the purpose of accounting

UNDERSTANDING THE PURPOSE OF ACCOUNTING:

Recording Transactions: To record all money entering and leaving the business. It also ensures payments are received and bills are paid.

Management of business: This allows effective planning, monitoring budgets and cash flow and controlling finance.

Compliance: This complies with legal obligations in financial reporting and internal accounting helps to combat against fraud.

Measuring Performance: It allows the measurement of the growth of gross and net profits. The sales revenue and efficiency when it comes to collecting money owned, the expenditure and costs in addition.

Control: The control of tracking…