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More on Accounting

Accounting is a function which includes processing the data and recording, summarizing and interpreting the results. The accounting information is used for calculating the financial position of the company, in terms of assessing the performance, taking decisions on monetary terms and controlling the bottlenecks which come in front of the accounting process. The process begins with two parts, one is to maintain the accounts and another one is to take decisions on the basis of the accounts retained.

The evaluation of the accounts can be carried on the basis of preparing the profit and loss account, balance sheet and the cash flow statement. All these three together assist the company to take the decisions on the financial position of the company. The accounts are maintained as to see the real financial position of the company and to present the same in front of the investors and the shareholders. The person who performs this job is known as the accountant.

The main aim behind forming up the accounts is to help the company in making a comparative study between the two financial years of the company.

The maintenance of accounts can also prove to be helpful at the time of payment of taxes; due to the busy schedule one cannot remember each and every thing, so the solution for this problem is to maintain the accounts regularly. It also assists in realization of the debts. If the accounts are retained properly, they can be used as an evidence for presenting in front of the court at the time of insolvency.

The emergence of accounting started from the grass-root level but now it has expanded and gained a lot of popularity in various aspects. Several branches of accounting are Social Responsibility Accounting, Financial Accounting, Cost Accounting and Management Accounting. This subject is being taught from secondary level to post-graduation level, the major difference is in the level of study.