What is The Purpose of Accounting
The Main Purpose of Accounting , whether it is a Financial Accounting, Cost Accounting, Managerial Accounting or any other Accounting Branch, is to record Business Transactions (collect data) during the accounting periods in order to analyze these transactions (data) for the Effective Performance ( Income Statement Or Profit And Loss Account or Performance of Management) or Financial Position or Health (Balance Sheet) of the business and finally report these results to the Users of Financial Statements / Information . In a Business Transaction, there are 5 Pillars of Accounts that recorded, analyzed and interpreted for an accounting period and then communicated to economic users in the form of Financial Statements. So, accounting serves as a language for the business daily life in the form of Expenses , Incomes / Revenues , Liabilities , Assets and Equity to show financial performance and financial position of the business during any accounting peri