Accounting as an aid to management:
The main object of Accounting is to record financial transaction systematically in the books of accounts and to find out profit-loss and financial position of a business. Ascertainment of profit-loss and financial position, interpretation and analysis of accounts and statements, development of accounting system, collection of statistical and economic data, formulation of financial principles and financial planning and controlling result as per plan etc. are the main function of accounting. In the modern age accounting is directly related with financial management. The function of management are planning, organizing, collecting business elements, motivating, coordinating and budgeting etc. Accounting helps the management in the following ways:
1)financial statement: a financial statement is often referred to as an account, although the term financial statement is also used, particularly by accountants. For a business enterprise, all the relevant financial information, presented in a structured manner and in a form easy to understand, are called the financial statements Policy determination:After doing the financial accounting an accountant can can determaine the policy which one will be the appropriate for the Org.
(1)Planning: Proper planning is very much needed for successful completion of various management activities. These planning – cash planning, sales planning, procurement planning, determining quantity of stock, development of planning, fixing up target – profit et are very much dependent on accounting data and information. (2)Organization: Accounting plays a very vital role in proper execution of the important function of management-organization. Accounting helps management-organization by providing information like percentage of profit over capital, capital investment position, management efficie3ncy in controlling etc. (3)Motivation: Labor-employees are to be motivated for achieving expected...
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