The Purpose of Accounting

The core aim of a business is to survive and to make a profit in its life time. And give the Manufacture or service the reputation to live its business life.

Business use different ways to use accounting to record transactions, Monitor and control accounting records and take appropriate actions, make management decisions to plan for the future and monitor and control those plans and finally measure financial performance (gross and net profits, and value owed to and by the business.

Recording Transactions

Businesses record transaction to sell what the business has spent by this I mean if an employee was asked to go and get more pens and paper from the local store as the next delivery time is in a few days and they are low on pens and paper now. So the employee would go down to the nearest store and buy the items that have been asked to be bought by the head of department. The employee would have to buy this out of their own money but the company will pay the employee back from what they have bought, the company would also want the receipt of the item purchased so that they can keep track of what they are spending on and where the money is going. So they will have records of any transactions that have been used and noted down.

Sales of Invoice

Sales invoice are used for receipt that has a connection between the buyer and the seller. It is a document that shows the date of purchase and name of buyer also includes what the item is and total amount of what item has been bought for. Below is a computer display of a sales invoice

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A Statement

A statement shows the cash flow of the business including the expenses of the company and the income of the business. This is recorded onto a statement that is then stored and kept safe in a company showing the financial flow of the business. This can also this can be shown over the last couple of year whether the businesses is improving over the year. For example with the business below

Purchase order


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