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The main object of audit is come ascertain the outcomes of the financial transactions of a business concern.
Objectives that Accounting
We have established 13 objectives that accountancy serves.
1. Identification and recording the transactions
The primary object of accountancy is to determine the financial transactions and to record these systematically in the publications of accounts. As a result, the true nature the each and every transaction is recognized without much exercise of memory.
With this finish in view, the transactions are mostly recorded in general and in a special journal and later on permanently various accounts are kept in the ledger.
2. Ascertainment of results
Every organization concern is interested to understand its operating outcomes at the end of a certain period.
The lot of profit or loss for a particular duration of a organization concern have the right to be ascertained by prepare an earnings statement v the help of ledger account balances of revenue nature.
Surplus or deficit the revenue for a particular period of a non-trading concern can also be ascertained by prepare income and also expenditure account or statement.
3. Ascertainment of financial affairs
Ascertainment that debts-liabilities, property, and also assets i.e. Full financial to work of an organization at a particular date is another important thing of Accounting.
Financial affairs of issue at a details date deserve to be ascertained by preparing a balance sheet.
The balance paper is the explain of assets and liabilities of issue at a details date.
4. Keeping accounts the cash
Cash book is a prominent book of the books of accounts.
Cash receipts and also cash payments room accounted for in this book. A variety of daily cash receipts, payments, cash in hand and cash at the bank can be well-known from this book.
Fraud, forgery, and also misappropriation of money are diminished by maintaining cash publication scientifically and also accurately.
5. Regulate over assets and also liabilities
For running a business successfully a business man is to obtain various assets choose land, building, machinery, etc.
He is to challenge various debts and also liabilities choose accounts payable, note payable, loan, bank overdraft, etc. Next by side v die acquisition of assets.
The actual position of this debts-liabilities, property, and also assets can be ascertained through the suitable keeping the accounts.
A businessman can take the right procedures for regulating the quantity of heritage decrease and liability increase.
6. Controlling money defalcation and also cost
Prevention that money defalcation with fraud and also forgery and controlling the expense of issue are also the main objects the Accounting.
Prevention of money defalcation and also cost control become easier if accounts are retained scientifically.
7. Providing financial data
Another noble thing of bookkeeping is to administer the involved parties with all financial information prepare financial statements and also reports etc. In time.
8. Helping tax fixation
Accounts all set on the basis of accepted accounting principles in thought about reliable to the income tax and VAT authorities for simple determination and settlement the tax and also VAT.
9. Determination and evaluation of policy
The thing of bookkeeping is to aid the administration in determining and examining the administration policies in to run the business successfully by providing necessary, information, interpreting and evaluating the gaue won statements.
10. Experimentation the orient accuracy that accounts
One the the key objects the scientific methods of audit is come make certain that accounts have been maintained in a ideal way. The orient accuracy the accounts retained in the ledger deserve to be assured by prepare a psychological balance.
Agreement the a psychological balance is the evidence of the orient accuracy of accounts. The advantage of acquisition loans because of the insufficiency the capital, borrowing resources from outsiders is felt necessary to run a business.
Loan givers are not willing to give a loan without learning the financial place of a business. The financial statement of a company concern shows the solvency or loan repayment ability of the concern.
11. Acceptability to others
Banks or financial establishments are interested to recognize the precise financial position of business concern because that sanctioning loans.
On the other hand, the federal government or various other authorities may also ask about the financial place of business concern for assorted reasons.
In this cases, the accounts kept in a disciplined method become quickly acceptable come the interested institutions or authorities.
12. Development of values and also accountability
The thing of accounts preserved in one acceptable way is to create greater values amongst individuals and organizations and thereby creating awareness in staying clear of money defalcation, misappropriation of fund and cost control by ensuring transparency and also accountability.
13. Adhering to legal bindings and also prohibition
As every kinds of business organizations need to abide by some legal bindings and also prohibitions, they room to preserve their accounts accurately.
Partnership law, revenue tax law, and firm law, etc. Compel organization organizations to keep their account in an ideal manner.
The key objectives of audit are keeping a complete and also systematic document of all transactions and assessing the financial place of a business.
Every separation, personal, instance or a service concern is interested to understand the outcomes of financial transactions and their outcomes are ascertained through the accounting process.
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A businessman deserve to ascertain the operation results and also financial position of his service at any type of time with Accounting.