6 Benefits of Accounting in General

Accounting can be defined as the activity of recording the financial cycle. In a broader sense, accounting is a series of activities in recording, measuring, identifying, presenting, and reporting financial transaction activities. Its function is to produce financial information that can be read and understood by interested parties. These interested parties include:

1. Decision maker in the company (internal)

Such as managers, directors, shareholders who have an interest in analyzing the company's financial condition. Besides that, it can also make the right decisions for the continuity of the running of the company.

2. Other parties from outside the company

Namely investors and the government. Investors have an interest in seeing the financial condition of a company. Is the company's finances in a stable and profitable state (can bring profit) so that it can provide benefits in the form of high and sustainable dividends for itself. Meanwhile, the government has an interest in company financial information related to tax matters that companies must comply with.

3 To Obtain Loans from Creditors.

Creditors who provide loans usually have certain requirements, for example, the company's liquidity ratio must be good. This ratio can be calculated through financial reports, namely by comparing the company's assets with current debt. The point is to find out whether the company is able to meet its short-term debt obligations. These creditors can be in the form of banking institutions or other creditor institutions.

4. Providing Financial Information for Investors

All parties will definitely be careful if they want to invest. Likewise with investors who usually invest large amounts of money. Therefore, careful and careful consideration is needed to decide whether an investor will hand over his money to a company or not.

5. Become Material for Consideration of Business Partners

A company will not cooperate with other companies that have unfavorable financial conditions. This is obvious because the company wants to benefit from each of its business relationships. So that the condition of a company is good or not reflected in its financial statements.

6. Is an Accountability Tool

The last benefit of accounting The job of a manager is to determine policies related to the company's operational activities, including financial policies. The policy is running well or not, can easily be identified through the company's financial statements at the end of the period.

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