1. Introduction
Nowadays, to keep the business operate in a sustainable and long-term way, there are many components contribute to the development of the company. In addition to the production, marketing and human resources departments, the accounting department can be considered as one of the cores of the business.
Accounting is the process of documenting a company's financial transactions. Accounting entails summarizing, evaluating, and reporting these transactions to oversight organizations, regulators, and tax collecting agencies. Accounting financial statements are a succinct overview of financial activities throughout an accounting period that summarize a company's operations, financial status, and cash flows.
2. The purpose and scope of accounting in
organization
2.1. The purpose of accounting
The purpose of accounting is to gather and report
financial data about a company's performance, financial state, and cash flows.
This information is used to make decisions about how to operate the firm, helps the manager decide
which areas to invest in, and so on. Accounting transactions amass this information in accounting records,
which are maintained either through typical business transactions such as
customer invoicing or supplier bills, or through more specialized transactions
known as journal entries. It is often organized into financial statements such as
an income statement, a balance sheet, a statement of cash flows, a statement of
sales income, etc.
2.2. Accountings’s scope
Accounting's role is to keep track of all financial
transactions. Everyone
from individuals to businesses needs to monitor their financial condition to
make appropriate spending adjustments. A company's primary goal is to make a profit. A
company's financial transactions are documented in its books of accounts in
order to determine its operating outcomes and financial status. Accounts of a
corporate concern's financial activities are also kept correctly to satisfy
other objectives.
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