Importance of Accounting

1.Importance to trading concern- Business is very competitive nowadays. Business cannot operate on sound basis for a long time until the financial records are kept and made available to its users. Accounting helps to determine profit or loss of the business. It also gives knowledge of debtors, creditors, other assets and liabilities.

2.Importance to non-trading concerns- Although the non- trading concerns are established with service motive, accounting is equally importance to them as they have to carry out their works within their funds and also their operations have to be answerable to the board of governors. They need to prepare balance sheet to know the financial position of their business.

3.Importance to the professionals and individuals- Professionals such as contractors, engineers, lawyers,etc. maintain accounting books to know their surplus or deficit of
incomes and expenditures of a particular period. Accounting also help farmers, workers and politicians to record their sources and uses of funds. It helps them to make expenditures within the limitation of budget.

4. Importance to the government- Accounting also helps to record the expenditures and revenues of the government. Every government should maintain a large number of accounting forms and books such as budget sheet, cash book, statement of expenditure,etc. With the help of accounting information the government plans for future budget. Accounting can be provided as documentary proof of the activities carried by a government, so it acts as a memory centre.