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Discussion A The purpose of accounting
I agree with you that the primary purpose of accounting is to help reflect the financial information regarding the performance of the business. The information regarding the business’s financial position is essential since it is used in making critical managerial and investment decisions, including; the number of employees that the business should hire, the level of remuneration, investment, and how to ensure the general health of the company (Barth, 2015). Bookkeeping is one of the best approaches used in handling the business’s financial statement. It involves tracking or monitoring the business’s cash flow, including the cash out and the cash in. It helps the business record the assets and liabilities and tracks the expenditure and tax compliance from the end of the business.
The internal role of accounting is essential to the business since it provides financial information to the stakeholders, including the creditors, investors, and management (Barth, 2015). This accounting information shows the business’s activities, strengths, and weaknesses, and the external users of this information are the creditors, external auditors, customers, and shareholders.
Post 2
Your definition and explanation are clear regarding the role of accounting in the society. I agree that accounting plays a fundamental role in running any form of business. According to Barth (2015) the primary role of accounting is to help track the income and the expenditures. Moreover, accounting has a primary responsibility to ensure statutory compliance. The information provides the management, investors, and the government with quantitative information regarding the business’s financial position that helps make informed decisions (Barth, 2015). This helps stakeholders to make an important decision regarding the company.
Based on your explanation, it is clear that internal accounting informs the primary roles and internal decision-making of the business. Accounting informs decisions made by managers, employees, directors, and owners. Internal accounting shows the financial position of the business through recording and balancing the assets and liability of the company. Accountants keep books of accounts and ledger books that track the income and expenditures of the business. These records make it easier for shareholders and creditors to gain business insights. Accounting information and records are used by external stakeholders such as customers, lenders, and external auditors to assess the finances of the business. Based on the accounting information, they may decide to invest in a business or sell their stock.
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