BALANCEBRIDGE PRIVATE LIMITED

In their own words

The primary objectives of accounting include systematic maintenance of records of transactions summarising and analysing business reports to assess the financial standing of the business entity. The following are the various objectives of accounting – Maintaining systematic financial records One of the most important accounting objectives is that accounting helps the business organisation keep a systematic and accurate record of the day-to-day transactions, which helps to understand the working of the business, payments made, income received, etc. To estimate and ascertain profits or losses Recording transactions concerning revenues and expenditures helps us ascertain the profit/ loss at the end of the financial year. Ascertaining profits or losses is important to make payments, making it one of the important objectives of accounting. Preparing financial reports to assess the financial position Accounting involves the preparation of a balance sheet which is a record of the assets and liabilities of a business entity. This helps in the analysis of the financial position of the business organisation. Ascertaining profitability can help us understand the strengths and weaknesses of the business organisation and formulate various policies and strategies to correct the weaknesses and improve the organisation’s strengths. Auditing of financial reports Another objective of accounting is that it helps in understanding the financial position of a company in the form of assets, debts, profits and losses, etc. These records are made available to the auditor, who can then analyse the reports to find any discrepancies and suggest the required corrective reforms. These reports also help the higher authorities formulate plans and make rational decisions. The objectives of accounting play an important role in every business entity. Accounting objectives class 11 primarily focuses on 2 divisions to accomplish the purposes or goals of accounting.

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