Financereading.com Contact Us          About Us
Online Study Material for Financial Degrees and Courses
     

 

                                                                 
You are Here: Home Principles of Accounting Basic Accounting Model Users and Importance of Accounting
 
 

Users and Importance of Accounting  of Accounting: 

Use and Importance of Accounting with Diagram:

 

The major reason for studying accounting is to acquire relevant knowledge and skills to participate in important economic decisions. The accountants provide information about such decisions both inside and outside the business enterprise.

 

It is not necessary that every individual engaged in different areas of business viz., finance, production, marketing, personnel and general management to be expert accountant, but they are more effective if they have a good understanding of accounting principles. Everyone engaged in business activity, from the junior most employee to the manager and owner is associated with accounting. The higher the level of authority and responsibility, the greater is the need for understanding of accounting concepts and terminology.

 

The importance of understanding accounting is not limited the business world. Many employees with specialized training in non-business areas also make use of accounting data and need to understand accounting principles and terminology. For example, an engineer responsible for selecting the most desirable solution to a technical manufacturing problem considers cost accounting data to be the deciding factor. Lawyers use accounting data in tax cases and in lawsuits involving property ownership and damages from breach of contracts. Government agencies rely on accounting data evaluating tile efficiency of operations and for appraising the feasibility of proposed taxation and spending measures. Thus, every adult engaged in business transactions must necessarily be concerned with the financial aspects of life.

 

Concluding the discussion, we can say that accounting plays a significant role in society by providing information to managers of all institutions and to other persons having direct financial interest in those institutions such as present or potential investors or creditors. Accounting information is also important to agencies having indirect financial interest such as taxing authorities, regulatory agencies, economic planners and other groups.

Accounting as a provider of information to users is illustrated in the following diagram.

 

Diagram:

 

Users of Accounting

 

Other Articles Related "Users and Importance of Accounting" Chapter:

 

Evolution of Accounting
Why Accounting is Necessary
Definition of Accounting
Users of Accounting
Difference Between Bookkeeping and Accounting
Common Accounting Terms
Common Accounting Abbreviations
American Accounting Terminologies
Double Effect of a Business Transaction
Rules for Debit and Credit
Journalizing
Special Journals
Ledger
Subsidiary Ledgers and Control Accounts
Running Balance Ledgers
Trial Balance
Steps in Preparing Trial Balance
Errors and their Correction in Trial Balance

 

   Principles of  Accounting

> Basic Accounting Model
> Completion of the Accounting Cycle
> Accounting For Merchandising Operations
> Fixed Assets and Depreciation
> Capital And Revenue
> Accounts For Non-Profit Making Organization

   Cost Accounting

> Role of Cost Accounting
> Materials in Cost Accounting

    Marketing Management

> Introduction to Marketing Management
> Planning For Marketing Management
> Organizing Marketing Management
> Control of Marketing Operations
> Marketing Information System
> Product Management
New Page 1
        Home Page           Contact Us           About Us           Privacy Policy            Terms of Use            Advertise           Useful Links

 

All the material on this site is the property of financereading.com. No part of this website may be reproduced.
All rights reserved Copyright
2012