Explain the primary objectives of Accounting.

The main objectives of accounting are:

To maintain a systematic record of business transactions

• Accounting is used to maintain a systematic record of all the financial transactions in a book of accounts.
• For this, all the transactions are recorded in chronological order in Journal and then posted to principle book i.e. Ledger.

To ascertain profit and loss

• Every businessman is keen to know the net results of business operations periodically.
• To check whether the business has earned profits or incurred losses, we prepare a “Profit & Loss Account”.

To determine the financial position

• Another important objective is to determine the financial position of the business to check the value of assets and liabilities.
• For this purpose, we prepare a “Balance Sheet”.

To provide information to various users

• Providing information to the various interested parties or stakeholders is one of the most important objectives of accounting.
• It helps them in making good financial decisions.