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Principles of Accounting

Describe for the students the primary objectives of accounting.
Explain the basic terminology of the accounting process or financial reporting.
Explain how accounting can affect your personal life emphasizing professional ethics.
Explain the role that technology has played in small business accounting.

Please include APA in-text citations and references

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1. Describe for the students the primary objectives of accounting.
According to Das (n.d.), the main objectives of Accounting are the following:
To keep a systematic record of all the financial transactions. There is a need to arrange the records in a systematic order so that it will be easy and quick to search for any record that is needed.

To protect the properties of the business. Accounting provides information to the manager or proprietor on the unjustified or unwarranted use of their properties.

To know if the company is profiting or losing. Financial statements are being prepared from the information gathered from the records of transactions. The profit and loss account states if the company is profiting (when revenue is more than expenditure).

To ascertain the financial position of the business. Aside from the knowledge of the profit or loss status of the business, the businessman (and other external users, e.g., lenders, government agencies) will also know the financial standing of his business, if he owes to someone or from an organization, how much he owes (liabilities). The balance sheet or position statement shows this information.

To facilitate decision making. Accounting reports almost all the information that are needed by the business and other external users so that they can facilitate a rational decision making. If the business is profiting, then the proprietor will develop more the strengths of the business. If it is losing, it is time to check the cause and how to remedy the situation before the business closes. Banks use financial statements as requirements for loans. Government agencies also look at these reports for tax purposes. (Das, n.d.)

2. Explain the basic terminology of the accounting ...

Solution Summary

Accounting - primary objectives, basic terminologies of accounting process, its effect on one's personal life and the role of technology in small business accounting. References are included.