Question

One page single spaced paper on why you think accounting is valuable to the business world. If you use sources other than your own creative words in the paper, you must use in text citations. You must also include a reference page. Please follow APA guidelines for citing and referencing. Try to use mostly your own creative words.

Answer 1

Accounting is called the language of Business. Language refers to system of communication used for conveying information.

Accounting is the language of business as it helps to convey information about the financial position of a business, the structure of business operations helps to record events and transactions in monetary terms.

Accounting is valuable to the business world:

• It helps to record the financial transactions and analyze the financial performance of the organization for the accounting period.
• The financial statement prepared through it such as Income statements helps to provide information regarding profit earned or loss incurred during the year.
• It also helps in producing Balance Sheet which reflects the financial position of the business by stating its Assets in the form of Current & Fixed Assets and Liabilities & Equities.
• Financial Statements provide a valuable source of information to interested users of financial statements such as Investors, Creditors, Management, Government, and various compliance Authorities.
• Accounting as a whole is a worldwide language used by businesses across the world.
• Accounting is based on certain assumptions, principles & Conventions. Various bodies across the globe have introduced Accounting Standards which are used by organizations around the world to make the information comparable.
• With the help of Accounting various Management decisions are based to ensure the growth, competition, and survival in the market. Hence accounting is a tool to make informed business decisions.
• Cash Flow Statement is one such analysis used by management to identify the source of cash inflows and outflow. This statement is so useful for the organization is prepared using accounting.
• Accounting helps to comply with statutory laws and provides information to the government for the generation of its revenue in terms of various forms of taxes.
• It also helps in the creation of different types of budget according to the requirement and future projections.

Hence Accounting is very essential for the business world to evaluate its performance, provide meaning to transactions occurring between parties.

The business world without Accounting is handicapped. Accounting provides purpose to the business.value to the business and most importantly language to the business which communicates financial performance through numbers.