Accounting is the language of organizations. They derive the financial statements and help in ascertaining the profit/loss conditions of the firm. It assists in getting information about the business transactions and its working. Accounting processes requires skills and it consists of knowledge, hence it is known as an art and science. Accounting is interlinked to many functions like recording, classifying and summarizing of financial data and information. The transactions are presented in terms of money and interpretation of results is done.
Accounting information helps in making decisions. It assists in knowing the financial position of business operations and transactions. The information derived from accounting statements is issued by investors, management, creditor, government, employees and customers. There are many areas in which accounting is practiced like public accounting, private accounting, government accounting and accounting education. The financial statements are Income and Expenses statements, Balance Sheet, Cash Flow Statement, Profit and Loss statement, etc which help in analyzing the financial positions of the firms.
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