Financial accounting has two main purposes:
Tracking business activities: This means keeping records of what a company does, like how much money it makes or spends.
Sharing that information with others: This is about giving important details to people outside the company, like investors and lenders, so they can make smart decisions about the company.
- Investors want to know if a company’s stock will go up or down in value, so they check how well the company is making money.
- Creditors, or people who lend money, want to know if the company can pay back its loans on time.
What is Accounting?
a) The process of creating business strategies and marketing plans
b) The process of recording, summarizing, and reporting financial transactions of a business
c) The process of managing employee schedules and company operations
d) The process of developing and selling products to customers
b) The process of recording, summarizing, and reporting financial transactions of a business
c) The process of managing employee schedules and company operations
d) The process of developing and selling products to customers