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.
