Accounting Questions and Answers

1.  Accounting is sometimes described as the language of business. What is meant by this description?

Solution                                                                                        

The reason that accounting is the "language of business" is because of its role in maintaining and processing all relevant financial information that an entity or company require for its managing and reporting purposes.

Accounting is aptly called the language of business. This designation is applied to accounting because it is the method of communicating business information. The basic function of any language is to serve as a means of communication. Accounting duly serves this function. The task of learning accounting is essentially the same as the task of learning a new language. To enable the accounting language to convey the same meaning to all people as far as practicable it should be made standard. To make it a standard language certain accounting principles, concepts and standards have been developed over a period of time.

2.   State the role of accounting in banking companies?

Solution:

Accounting is a very important aspect in any business operation. It involves the measurement and provision of accurate financial information to managers, investors, tax authorities, and other stakeholders to help them make decisions about how they should allocate the resources of a company, organization, or public agency. Due to the nature of the accounting function, accounting firms provide critical support to their clients.

Among the most common financial services accounting firms offer are book keeping in a systematic manner, provides information for planning and decision making, taxation, investment, and human resource planning. Because what they offer are professional services, it is imperative for accounting firms to identify all factors and issues that would significantly impact their profitability and their reputation. Moreover, to increase their efficiency, management of accounting firms should always be ahead of everyone else when it comes to innovating and updating their knowledge and technology. In addition, there is a need for these companies to invest on their employees or workforce, as these people hold the key towards building relationships with clients.