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About Accounting !
Accounting is one primary area in any business. The summary, reporting and analysis of the financial transactions in any business are involved in accounting. The financial reports, which are prepared through the accounting, summarize the operations of the company, financial position and the cash flows over a particular period. The general objectives of accounting are to record the financial transactions systematically, to evaluate operation results, financial position analysis, liquidity position analysis, business properties' protection, rational decision-making and law requirements satisfaction. Accounting is important to owners, management, creditors, employees, investors, government, consumers and research scholars. The main accounting functions are record keeping function, managerial function, legal requirement function and the function of acting as language to business. The main advantages of accounting are to assist in recording the company transactions, profit or loss information provision, provision of information related to management ability judging, earning power prediction and enabling compliance with many legal formalities. There are some limitations for accounting, which include the following. Historical nature of
accounting does not reflect the current financial position of business. Non-monetary transactions are not captured through accounting. The other limitations include non-comparability of the accounting statements, subjectivity in financial statements, ignoring price changes and ignorance of inflation.
The two main accounting methods are single entry and double entry methods. In the single entry method, the business transaction records are incomplete. In the double entry booking method, based on benefit giving and benefit receiving aspects, transactions are recorded. The main accounting streams are financial accounting, cost accounting and management accounting. In the first case, only the financial part of transactions is captured. In the second case, the historical costs associated with each project are captured. In the third case, the necessary information for the management is provided through this part of accounting and thus becomes accounting for management.
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