Accounting Essay

Accounting is the guide post for management. A firm should know the financial implications of its operations. The financial score of the firm is kept by the accounting system. It points out the problems faced or likely to be faced by the firm. It also brings to its notice opportunities that are likely to arise. It indicates possible action, when needed.
Accounting may be defined as the process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information. The objectives of accounting are to provide information for the following purposes:
1) Making decisions concerning the use of limited resources, including the identification of crucial decision areas and determination of objectives and goals.
2) Effectively directing the controlling of an organization's human and material resources.
3) Maintaining and reporting on the custodianship of resources
4) Facilitating social functions and controls.
The main objective of accounting is to provide information to the users to make relevant decisions and form judgments. Besides decision making, the control and custodianships of accounting are also important. It also has social obligations as the accounting information is used by many people such as customers, employees, government, investors or society.
In providing information to the users, accounting has to perform three functions:
a) accumulation of information b) measurement of information and c) communication of information.
The accounting system identifies and gathers data. The process of data accumulation involves the recording and analysis of economic events. The accounting records include journals and ledgers. These records are essentially historical in nature, as the events recorded are the ones which have already occurred. Accounting also performs the measurement function. It assigns monetary values (for example, dollars or pounds) to economic events. While performing the measurement function, it acts in accordance with the generally accepted principles. Some economic events cannot be measured accurately, they are estimated. Accounting is the language of business. Therefore, the information accumulated and measured by this system should be periodically communicated to the users. The information is communicated through statements and reports. The financial statements and reports should be reliable and accurate. Standard criteria, such as full disclosure, materiality, consistency, conservatism and fairness, should be adhered in this communicating information to the users.
The basis for financial planning, analysis and decision making is the financial information. Financial information is needed to predict, compare and evaluate the firm's earning ability. It is also required to aid in economic decision making like investment and financing decision making. The financial information of an enterprise is contained in the financial statements or accounting reports.
You can clearly understand by reading the previous paragraphs the importance of accounting as a decision making and controlling tools of business. Accounting essay deals with different aspects of this subject. Thorough research and good amount of knowledge about different accounting systems and financial matters is extremely essential for writing a good accounting essay. As a college student you need to give serious effort to write a quality paper in this subject but it is very rewarding also as the person with good knowledge in this subject is highly sought after in the industry.
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