ROLE OF ACCOUNTING IN BUSINESS

The role of accounting in business is to help interested parties, both internal and external, to make business decisions. The accounting process consists of measuring and summarizing business activities, interpreting financial information, and communicating the results to management and other decision makers.

Financial accounting generates some of the key company documents, including profit and loss statement or P&Ls. P&Ls show the financial details of a business over a specific period. Financial accounting also produces the balance sheet which provides a snapshot of a business's assets, debts, and equity at a specific moment in time.. Financial accounting also helps the managers in the business to manage more efficiently by providing them views of financial information which may include monthly management reports presenting costs and profits against budgets, sales, or other key metrics. Reporting can be customized for the specific needs of the business.

Without these financial documents it would be very difficult to run the business or to make decisions regarding the business .

SOME KEY POINT

·  Financial accounting generates some of the key documents, including profit and loss account showing the method of business traded for a specific period and the balance sheet which provides a statement showing mode of trade in business for a specific period.

·  Without these financial documents it would be impossible to run the business or to make decisions regarding the business.

· The accounting process consists of measuring and summarizing business activities, interpreting financial information, and communicating the results to management and other decision makers.

·  Management accounting also motivates managers and other employees towards achieving organizational goals. A well motivated staff performs better and is more productive. Organizations are able to achieve their goals if employees are well motivated.