Purposes of accounting

Most businesses use business accounts to

• gain an overview of the perfromance / success of their oporations

• provide info that is needed for disision making

recording transactions

• keeping important receipts and expenses

• benifits- making informed desions, budegeting, cash flow

managment of the business

• planning

• monitoring

• controling

• the disisions they have to make with the financial info- dividends to shareholders, reinvesting, growth

measuring performance

• u need accounting to see if the business is making a profit or a loss

• indicators of financial performance: sales revenue, gross profit, net profit

compliance

• companies financial matters being handled in acordance with laws and regulations

• should be able to provide accurate info abt accounts to to shareholders and regulating authorities at any point

• prevents fraud

control

• control of in/out flows

• trade reveivables - money owed to the business that isn’t paid for

• trade payables - money u owe to another business

• is key for healthy cash flow and supplier regulations

never fall out with u sources of finance never fall out with u sources of finance