The following are the advantages of accounting to a business:
i) It helps in having complete record of business transactions.
ii) ' It gives information about the profit or loss made by the business at the close of a year and its
financial conditions. The basic function of accounting is to supply meaningful information about the
financial activities of the business to the owners and the managers.
iii) It provides useful information form making economic decisions,
iv) It facilitates comparative study of current year's profit, sales, expenses etc., with those of the
previous years.
v) It supplies information useful in judging the management's ability to utilise enterprise resources
effectively in achieving primary enterprise goals.
vi) It provides users with factual and interpretive information about transactions and other events which
are useful for predicting, comparing and evaluation the enterprise's earning power.
vii) It helps in complying with certain legal formalities like filing of income-tax and sales-tax returns. If
the accounts are properly maintained, the assessment of taxes is greatly facilitated.
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