Accounting

This is a system that communicates information to an organization to act as an aid to management in the organization in coordination, planning, controlling and decision making in order for the organization to achieve its pre determined goals and objectives of profit making or use of resources.

Accounting system is standardized by accounting regulations which help the management minimize errors, fraud and waste within the organization.

Non financial information is used by management and non profit making organizations to make decisions.

Basic functions and importance of accounting system are;

1. Measuring of resources of a business entity as represented in the balance sheet.

2. Measures the resources of a company i,e the claims, results measured at a given moment in time. The balance sheet shows claims while income statement shows results.

3. Contributes to the development of modern ideas through research.

4. Includes to development of better information policy and improves control of the top of the organization.

5. Through accounting system we prepare budget which help management emphasis control through out the organization.

6. Provide course alternative at basic operation point.

7. Provide cost consciousness in the organization.

8. Establishes means media through which information can move from one to another either within organization or between organizations.

9. Accounting system provide a means through which an organization gather information and communicates information to an organization to act as an aid in the organization in coordination and decision making in order for the organization to achieve its pre determined goals and objectives of profit making or use of resources.

10. Also used in non profit making organizations to measure resource utilization and wages..

11. Accounting system provide information to management which help them choose from various alternatives provided by the accounting information.