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Advantages of Accounting

Accounting is needed for the management decision and monetary transactions of an organization. Here are some of the advantages listed below of accounting-

• States profit and loss- Accounting is helpful for the management to analyze the net profit earned and loss incurred during the year.
• Presents the financial position- It helps the business person to draft a balance sheet at the end of each year, which allows them to identify the financial situation of an organization. It highlights the value of assets and liabilities of the business.
• Law and income tax- With the help of recorded books of accounts, accounting helps the businessmen to pay off the relevant tax it owes to the government. It also acts as evidence in the court of law.
• A comparative study- Accounting helps the businessmen to maintain a systematic record which further supports them to compare the results of the present year with the results of the previous year.

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