Chapter - 1st | Introduction To Accounting

Introduction To Accounting

Accounting is the process of identifying, recording, classifying, summarizing, interpreting and communicating financial information to the users for judgement and decision marking.

Objectives of accounting

1. To keep systematic and complete record of business transaction in the books of accounts according to specified principles and rules to avoid the possibility of omissions and fraud.

2. To ascertain the profit earned or loss incurred during a particular accounting period which further help in knowing the financial performance of a business.

3. To ascertain the financial position of the business by means of financial statement i.e. balance sheet which shows assets on one side and capital & liabilities on the other side.

4. To provide useful accounting information to users like owners investors, creditors, banks, employees and government authorities etc who analyse them as per their requirements.

5. To provide financial information to the management which helps in decision making , budgeting and forecasting.