What is Accounting

Key Objectives of Accounting

• Recording Transactions: Every purchase, sale, and expense is meticulously documented. It’s like building the chapters of a financial novel, one transaction at a time.
• Classification and Categorization: Like characters in a story, financial transactions are classified into categories – assets, liabilities, income, and expenses. This organisation forms the plot structure of the financial narrative.
• Summarising Financial Data: To make sense of the story, accountants create financial statements. These documents – balance sheets, income statements, and cash flow statements – offer a condensed version of the financial novel, making it easier to comprehend.
• Interpreting and Analysing: Just as a literary critic dissects a novel, accountants analyse financial data. They seek patterns, trends, and anomalies to understand the financial health of a business, providing valuable insights to decision-makers.