The Purpose of Accounting

Accounting provides data which is used as a way of understanding or visualising the effects of business activities. By understanding and using the numbers you get through correct bookkeeping and accounting, you will be able to make decisions about which activities you should involve yourself in more to get the results you desire. The trouble is that many people don’t completely understand what certain important accounting terms mean.

Some of the most important aspects of accounting to understand in order to be on top of your financial performance are the balance sheet, profit and loss statement, and statement of cash flow.