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Accounting is essential for tracking financial performance, complying with tax and regulatory requirements, and making strategic decisions about resource allocation. Some of the key functions of accounting include bookkeeping, financial reporting, auditing, tax planning and preparation, and management accounting. Bookkeeping involves the recording of financial transactions, while financial reporting involves the preparation of financial statements such as the balance sheet, income statement, and cash flow statement. Accounting provides essential financial information that helps businesses make informed decisions. It allows management to evaluate the financial health and performance of the company, assess profitability, analyze costs, and determine the feasibility of investment opportunities.
FAQ's
Accounting is the process of recording, classifying, and summarizing financial transactions of a business or organization to provide information that is useful in making business decisions.
A balance sheet is a financial statement that reports a company's assets, liabilities, and equity at a specific point in time. It shows the company's financial position and is used to analyze the company's financial health.
An income statement is a financial statement that reports a company's revenue, expenses, and net income over a period of time, typically a month, quarter, or year. It shows the company's profitability and is used to evaluate the company's performance.
Assets are resources owned or controlled by a company that have future economic value. Liabilities, on the other hand, are obligations or debts owed by the company to external parties.
