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Accounting is the systematic and comprehensive recording of financial transactions pertaining to a business. Accounting also refers to the process of summarizing, analyzing and reporting these transactions to oversight agencies, regulators and tax collection entities. The financial statements that summarize a large company's operations, financial position and cash flows over a particular period are a concise summary of hundreds of thousands of financial transactions it may have entered into over this period.
Importance of Accounting
1. Helps in record keeping and decision making
2. Helps in evaluating the performance of business
3. Helps to manage and monitor cash flow
4. Helps business for statutory compliances
5. Helps to create budget and future projections
6. Helps in filing financial statements with regulators, stock exchanges and filing of tax returns
7. Provides information to Investors, banks and lenders
8. Other information - qualitative and quantitative customized reports which are required in day to day operations
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