One of the following is not a function of accounting
a) To interpret and record the effects of business transactions.
b) To classify the effects of similar transactions in a manner that permits the determination of various totals and subtotals useful to management.
c) To ensure that a business organization will be managed profitably.
d) To summarize and communicate information to decision-makers.
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The Correct Answer for the given question is option c) To ensure that a business organization will be managed profitably.
Answer Explanation for Question: One of the following is not a function of accounting
A business’s accounting system is responsible for its finances. Understanding the function of accounting will allow you to manage and analyze financial resources. Accounting is used by every company to record, track, execute, and predict financial transactions. Accounting stores and analyzes financial data, as well as oversees the movements of money. Accounting is used to prepare financial statements for a company’s shareholders, employees, and leaders. It is also used to facilitate funds entering and leaving a company.
Functions of Accounting
Some of the functions of accounting included in business are as follows:
i. Business Costs and Revenue: Accounting is important for tracking expenditures in relation to income. Just like managing your personal finances, accountants keep track of expenses and payments to ensure the company’s financial records are accurate and up to date.
ii. Accounts Receivable: Accountants study a company’s profits to ensure that revenue is continuously flowing into the company’s bank account. Accounting ensures a company receives any payment it is due.
iii. Accounts Payable: Paying bills is the function of accounts payable, where they ensure the company pays for any money owed and ensure it is a legitimate charge. Accounts payable also helps set up the due dates for payments, so the company can best manage their cash flow.
iv. Payroll: Accountants deduct employee wages from company funds for paychecks. If employee benefits are paid from the employee’s earnings, they manage them as well. By determining how wages affect a company’s profits, accounting can determine how employees are compensated.
v. Financial Reporting: A public company must also prepare quarterly and annual reports describing the assets, costs, and profits of the company. If the company is publicly owned, its accountants use digital systems to store and calculate data. These fiscal reports are also used by privately owned companies to analyze their financial resources.
I hope after going through this post you might have clearly understood the Question: One of the following is not a function of accounting
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