Introduction to Business - Accounting

This picture shows the control process in a simple chart.

Accounting:

- Records all the transactions such as buying or selling of a business.

- Summarising the records into a report so that people can read them easily to make relevant decisions.

Accounting is also useful for evaluating business performance. It is also used for discharging accountability. The picture below shows the purpose of accounting:

The Income Statement is a summarised results of a business, also known as the Profit and Loss Statement. This is how profit and loss are counted:

However, that was just a very simple one. A proper income statement would contain more information compared to the one above: