Accounting Business

ACCOUNTING IMPORTANT BUSINESS.

Accounting is the measurement, processing and communication of financial information about economic entities. Accounting is aimed at reporting of business activities for management and control purpose and for smooth running of business activities at all levels. Accounting is done by accountants who are professionally trained. Accounting important business is highly required.

There are four levels of accounting;

a) Financial accounting-preparation of reports organizations financial management

b) Management accounting- Preparation of report on internal use by management.

c) Tax accounting -Preparation of reports on tax payment and tax returns

d) Auditing -Focus on systematic evaluation of statements and records in a business.

Below are some importances of accounting important business.

1. Financial accounting generates loss and profit account showing the method of business traded for a specific period and the balance sheet which provides a statement showing mode of trade in business for a specific period.

2. Management accounting helps managers to better inform themselves before making decisions of business operations.

3. Financial accounting helps companies create financial reports that can be compared with other companies so that they may know their position in the business world.

4. Management accounting is also of importance in helping managers in different levels of the business to make informed decisions and improve the company’s profitability.

Without accounting, a business lacks track of how activities are conducted, how decisions will be made and how finances are handled hence leading to depreciation. A business is all dependent on accountancy hence the great need to keep track of accounting.

REFERENCES

1.Accounting,wikipedia