Objectives of Accounting are as follows:-
(i)
Systematic recording of transaction: - i.e. Book-Keeping.
(ii)
Ascertainment of
results of above recorded transaction.
(iii)
Profit and loss
Accounts are prepared for ascertaining results.
(iv)
Ascertainment of financial position of business: - Balance
Sheet is prepared.
(v)
Assisting the management for decision making, exercising
control, budgeting and forecasting.
(vi)
Providing information to the users for rational decision
making:-
(vii)
To know solvency
positions
FUNCTION OF ACCOUNTING ARE AS
FOLLOWS:-
1. maintaining systematic accounting
records
2. preparation of financial
statements
3. meeting legal requirements.
4. Measurement:- It measures past
performance of business and shows current financial position.
5. Forecasting:- It helps in
forecasting future performance and financial position using past data.
6. Decision-making:- It helps users
to take rational decision.
7. Comparison and Evaluation:- It
helps in comparing and evaluating financial results of different intervals.
8. Control:- Accounting identifies
weakness of system and provides feedback for control.
9. Meeting legal requirements:-
Accounting provides necessary information to government to exercise control and
collecting tax. Accounting records are accepted as evidence by the court of law.
Book-keeping :- It is a process of
recording transaction and events or financial data of business operation in a
systematic manner. It is basic function of accounting. In it proper books of
account are prepared.
Objective of
book-keeping :- Complete Recording of transaction:- It records all transaction in
systematic manner Ascertainment of financial effect on business:- It shows
combined effect of transaction made during accounting year.
Distinction
between Accounting and Book-keeping
#ObjectivesofAccountingareasfollows
|
Book-keeping |
Accounting |
|
1.
It
is process of recording transaction or events 2.
It
is a base for accounting 3.
Financial
statements do not form part of this process 4.
Managerial
decisions are not taken on the basis of these records 5.
There
is no sub-filed of book-keeping 6.
Financial
position cannot be known through book-keeping |
1.
It
is process of summarizing recorded Transactions. 2.
It
is considered as language of business 3.
Financial
statement are prepared on the basis of book-keeping records 4.
Management
takes decision on the basis of these records. 5.
It
has several sub-filed like financial Accounting, cost accounting, management
accounting etc. 6.
Financial
position are ascertained on the basis of accounting records. |
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Salary of a Qualified CMA
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Best Career Option After Class 12th
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Why to choose career in "CMA" ?
The Reasons to Choose a Career in "CMA"
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