Principles of Accounting – ACC/280
Financial Statements Paper
The purpose of accounting is to provide a means of reporting, recording, summarizing, and interpreting economic data within an organization. Accounting is used by everyone in one form or another. Everyone should have a basic understanding of accounting as it could be extremely beneficial to everyone. Within every company there should be an accounting department as this department is very important for the company. The accounting department has to track all of the company’s financial activity. This helps the decision makers of the company with the most cost efficient way to operate the business. The accounting department also helps the business be able to make sure that they stay within any and all of the laws or regulations within the county, state, and country, (and for certain companies that deal outside of the United States, other countries laws) that could lead to fines and or lawsuits. If accounting is used properly, it keeps the company in good financial position. Good financial position is extremely important so that the company will be able to find investors that are willing and able to invest within the company. Accounting is the main driver that investors use when deciding where to put their money. The more investors that a company has the more the company will be able to do and accomplish which will earn the company and the investors more money. It is important for all business to make sure that they keep up to date on their accounting because some businesses grow so fast that the owners do not have time to do the accounting because they are focusing on customer service that the business begins to fail and they will not be able to catch it until it is too late. All business owners need to realize just how important accounting really is so that they can actually be able to see what a difference managing...