Enumerate main objectives of accounting.
The main objectives of accounting are describe as below-
- Maintenance of Records of Business transaction.
- Calculation of profit and Loss.
- Depiction of financial position.
- Providing Accounting information the users or it's owners.
(b) Calculation of profit and Loss :A profit and loss statement is calculated by totaling all of a business’s revenue sources and subtracting from that all the business’s expenses that are related to revenue.
Profit/Loss = Total Business Revenue - Total Business Expenses
(c) Depiction of financial position :The statement of financial position also known as a Balance Sheet represents the Assets, Liabilities and Equity of a business during a time period.
Example: Assets include cash, stock, property.
(d) Providing Accounting information the users or it's owners :
There are two types of User of Accounting information they are -
- External users,
- Internal users.
External user : External users are creditors, investors, government, trading partners, regulatory agencies, international standardization agencies, journalists.
Internal user : Internal users are owners, directors, managers, employees of the company.