Accounting involves any business, company or person recording their financial transactions, http://essay-writing973.mystrikingly.com/ such as payments coming in or paying going out. It is very important for a business to record their transactions for a number of reasons: Economic decisions: If a company is going to succeed then it’s needs to be aware of what it can and cannot afford and how the resources available will be effectively used and not put to waste. Inventory: Knowing how much of a product you have can be save you from buying the same product again and wasting money on something you longer need. Stocking up on a certain product that is no longer making sales could make it more prone to damage or theft, therefore making the product un-sellable.
By recording the amount of stock you have left you could save money and make a larger profit, this would then further secure the stakeholders you have investing in your business. Monitoring activity: during the process of buying or selling goods mistakes can be made and those mistakes can properly be identified and dealt with if it is kept on a record.
