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Usefulness of Accounting for Businesses Accounting may be described as a method of communicating the financial health of an organization or business to one or all of the interested parties. Accounting is a way to assess the assets, cash flow and liabilities, or the future of the entity for all the future and current investors. The livelihood of a business depends on this and all types of businesses contain the basic information needed to get this job done. Accounting and its concept All accounting has a standard set of principles related to accounting that needs to be followed by every kind of business. This ensures that all business accounting procedures have unity and clear understanding, irrespective of the type of business. This system is known as Generally Accepted Accounting Principles or GAAP. They are the general rules that businesses need to follow in order to record their financial information. These rules aren’t enforced by any law, but they are advantageous to the businesses when reporting to different loan agencies. Applications of Accounting Accounting has many layers. There is a unique type of accounting applicable for all facets of a business. The areas of accounting include payroll, credit, taxes, receivables, assets, public and payables. Recording of day to day transactions is known as basic book keeping. The transactions get recorded as credits and debits and are required to always balance what is known as the accounting equation. This is what determines the overall success of a company. Computers have made these transactions easier to work for the company. Thu push of a button is all that is required to produce reports of any kind. These reports include balance sheets, statement of profit and loss, retained equity and assets and liabilities report. All of these are useful in giving a picture of the company and where it is headed. Contact Us Information Best Tutors for USA Chicago, Illinois, USA, 60608 Call @ +13476947305 Live Chat @

Usefulness of accounting for businesses