Question

How is Accounting important for this world for the businesses?

100 words atleast

Answer 1

Accounting

Accounting is the art, as well as the science of recording, classifying and summarizing of business transactions which are of a financial character and are expressed in terms of money.

Though, Accounting is as old as money itself, the modern system of accounting owes its origin to Luca Pacioli, an Italian who first published his book on Double Entry System Of Accounting in 1494.

Accounting is an information system which receives data, process the same and gives its output in the form of information which is useful for decision making.

Modern accounting is often called the language of a business. The basic function of a language is to serve as a means of communication. Accounting serves this function by communicating the results of the business operations to various parties who are interested in it.

Business is carried out mainly to earn profit. A businessman will be very eager to know the amount of profit made or the loss incurred to the business during any particular period. He will also be interested in knowing the financial position of the business as on any particular date. For these he should know what are the financial dealings takenpalce in the business. There arises the role of accounting in business. Accounting came into practice as an aid to human memory by recording daily transaction of business.