Summary: | The main purpose of accounting, more precisely, its component called financial accounting, is to form reliable information about the property status and financial results of the organization. In modern economic conditions, the business has been evaluated not only based on property status but also based on the results of the organization’s activities. Indeed, if the owner wants to reorganize production, to stop production altogether, it is important to assess the property status - in which case the information about the value of the property, and how much profit can be made from its sale is up to date. On the contrary, to develop the business, the enterprise needs to know more about the profitability of the enterprise, and its growth rates, when purchasing its shares in whole or in part, making decisions on lending, investing, and concluding cooperation agreements. This information will be the basis for thinking about the possibility of the enterprise not only once, but constantly earning more shortly, and accordingly to pay dividends, repay debts, and settle accounts with suppliers.
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