IMPORTANCE OF ACCOUNTING

Importance of Accounting



Importance of Accounting

Introduction

The importance of accounting is undeniable and is more apparent in today's market. Accounting is indeed responsible for identifying, measuring and communicating economic information that allows different users and businesses to make judgments and decisions. Accounting is integrated information system of the company whose functions is to collect, classify record, summarize, analyze and interpret financial information of the organization. The primary objective of accounting is to provide financial information for the organization to individuals and legal entities interested in operating results and economic situation.

Discussion

Accounting is an important technique for the preparation and delivery of financial information of business transactions, financial and economic undertaken by commercial entities, industrial services of public services and private and are used in decision-making. Accounting systems communicate financial information, is a way to know which state is the company (Elliot, 2004). Accounting provides business information to managers, as a contribution to their functions of planning, control and decision making, the financial information they require reliable, understandable, objective, reasonable or timely. When determining the amount of income and other taxes and other taxes by the company, creditors and lenders ask for the company financial information in order to determine their ability to pay and decide to authorize a loan. The complexity and a large number of commercial transactions have presented the need to record all business transactions. Whatever its nature, this technique plays a vital role in the economic life of a business. The importance is based on some main purposes as:

•For use in planning and control of normal business operations.

•To select alternatives to decision-making and policy formulation.

Origin of accounting

Accounting dates back to ancient times when man is forced to carry logs; and control of their property because his memory was not enough to save the information required. It has been demonstrated by many historians that in times like Egyptian or Roman were employed techniques derived accounting of trade. The beginning of the literature is limited to the accounting work of the Franciscan Friar Luca Paccioli, 1494 entitled "Summa de Arithmetica, Geometry Proportioni et Proportionality "where we consider the concept of double entry for the first time. Currently, within which are the systems of business information, accounting stands as one of the most remarkable and effective to make known the various fields of information units of production or businesses. The concept has evolved greatly, so that is increasing the degree of "specialization" of this discipline within the business environment (Carruthers, Wendy, 2005).

Accounting as a Science

Accounting can be defined as a science that deals with systematized instrumentals and generalizes the accounting methods, while investigating the achievement of a new one. The science of accounting is aimed at building a methodological body, providing an analysis tool for other sciences, particularly the economy of the company.

Types of Accounting

Public Accounts

Principles and procedures associated with accounting for government, this means the records kept within the various units that constitute the public sector, and any publicly-owned qualified ...