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The purpose of accounting functions with examples of peoples bank

What is Accounting?

Accounting is the systematic process of identifying, measuring and communicating financial information about business activities to users of such information. It encompasses recording, classifying, summarizing and presenting data relating to an organization’s financial transaction including receipts and payments, assets and liabilities, etc. 

About Peoples Bank 

Peoples Bank is one of the oldest banks of the country which started its operation in 1902 and now it is providing a full banking facilities like personal banking, business banking, loans, mortgage, investment and insurance services. Currently, the bank has active states in Ohio, Kentucky and West Virginia and it has embraced community relations through its foundation wherein it has given out grants as well as scholarships, and insurance. With a strong presence in states like Ohio, Kentucky, and West Virginia, the bank is deeply committed to community involvement, having awarded  in grants and scholarships through its foundation. Peoples bank is committed to integrity respect, and excellence, hence they ensure their services are individualized and corporate with the people in their community. Also, it offers what today’s customer requires such as internet and mobile banking, among other services. (Peoples Bank, 2019) 

The purpose of Accounting within Peoples Bank  

Financial reporting

Accounting as a discipline offers a structured method of organizing, classifying, analyzing, and communicating economic information. This information is summarized into figures in the financial statements including; Income statement, Balance sheet and statement of cash flows. These consist of statements which provide a clear picture of the financial situation of any business venture to aid various users in taking their decisions. For instance, these reports help the investors to determine the prospect and returns on their investments. . (University of Minnesota, 2016)

Decision making

Accounting plays an important role of helping in the decision making process among individuals. Finance perform an important role of interpreting financial information for use in the formulation of the organizational business strategies. This involves establishment whether new projects are viable, defining efficient ways of utilizing the resources and formulating targets on bit of money to be made. Financial records assist management in making decisions which a company intends to achieve in its long run. (AccountingTools, 2024)  

compliance and legal requirement

Accounting helps various firms to adhere to various legal and regulatory provisions. These include tax compliance, compliance with financial reporting regulations, and other compliance. Most of the accounting procedures assist the business to overcome legal problems or penalties since most of the financial transactions are well recorded and reported. This compliance is vital for the company’s prospects and business running reputation. (Tripp, 2005)

Budgeting and planning

Accounting is very essential in preparation of budgets and financial statements. Accounting aiding in presenting all the specific financial information makes budgeting and other financial requirements reasonable and feasible. This process encompasses establishment of financial goals, assignment of resources and evaluation of performance with reference to the budget. Budgeting and planning helps the businessmen to control expenditure of finance and to achieve their organization's financial goals and objectives.

Performance evaluation

Accounting offers the reader the resources for assessing the financial profitability of an organization. There are various profitability, liquidity and solvency that are used by business to evaluate their financial performance. The evaluation aids management in establishing the strengths and weakness it needs to make changes. Performance evaluation should be regular to allow the business to assess its financial position and modify it to suit the changing environment. (Smith, 2024)    

References

University of Minnesota, 2016. The Role of Accounting. [Online]
Available at: https://open.lib.umn.edu

AccountingTools, 2024. The purpose of accounting. [Online]
Available at: https://www.accountingtools.com

Smith, D., 2024. Functions of Accounting: A Clear Explanation. [Online]
Available at: https://accountingforeveryone.com

 



     



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