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Accounting

Accounting involves recording, summarizing, analyzing, and reporting financial transactions to inform stakeholders about an entity's financial performance. Bookkeeping is a systematic process within accounting that maintains accurate records of financial transactions. The objectives of accounting include recording transactions, summarizing financial information into statements, and facilitating decision-making for management.

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19 views1 page

Accounting

Accounting involves recording, summarizing, analyzing, and reporting financial transactions to inform stakeholders about an entity's financial performance. Bookkeeping is a systematic process within accounting that maintains accurate records of financial transactions. The objectives of accounting include recording transactions, summarizing financial information into statements, and facilitating decision-making for management.

Uploaded by

guptapranay44
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Accounting

Accounting is the process of recording, summarizing, analyzing, and


reporting financial transactions of a business or organization. The primary
purpose of accounting is to provide information about the financial
performance and position of an entity to various stakeholders, such as
management, investors, creditors, and regulatory authorities.

Book keeping
Bookkeeping is the systematic process of recording, organizing, and storing
financial transactions of a business or organization. It is an essential part of
the broader field of accounting. The primary purpose of bookkeeping is to
maintain an accurate and detailed record of all financial transactions to
facilitate the preparation of financial statements and aid in managerial
decision-making.

Objectives of accounting
1. Recording Financial Transactions:
 Objective: The fundamental objective of accounting is to systematically
record all financial transactions of a business or organization. This includes
transactions such as sales, purchases, expenses, investments, and
borrowings. By recording these transactions, accounting provides a detailed
and organized history of the financial activities of the entity.
2. Summarizing Financial Information:
 Objective: Accounting aims to summarize and condense the recorded
financial data into meaningful and understandable formats. This involves the
preparation of financial statements, such as the income statement, balance sheet, and
cash flow statement. These statements provide a concise overview of the financial
performance and position of the business, aiding in decision-making by management and
providing valuable information to external stakeholders.
3. Facilitating Decision-Making:
 Objective: Accounting is crucial for supporting decision-making processes within an
organization. Managers use financial information to assess the profitability, liquidity, and
financial health of the business. By providing relevant and timely information, accounting helps
in making informed decisions related to investments, budgeting, pricing strategies, and
resource allocation.

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