-Harsha Lal- ACW Accounts at Edumarz
Ans- Accounting is an art to record, classify and summarize the money related transactions and interpreting the results thereof.
Accounting keeps a permanent record of business transactions which helps to find the financial position of the business, through profit and loss and balance sheet. It’s a reliable source of data which ultimately helps the interested parties.
But there are certain flaws in accounting as well- It considers only monetary transactions. Non monetary aspects such as honesty, skills are ignored. The transactions are based on past events, it does not take into consideration the price level changes. It’s credibility is affected as the accounting is done by an accountant, who may give biased judgements. So, keeping all this in mind the accounting information should be used in an appropriate manner, to achieve the desired results.