What is the function of accounting in business?

The function of accounting in business primarily involves recording, summarizing, and reporting financial transactions. This foundational role ensures that all financial data related to the business is accurately captured and maintained. Through systematic processes, accounting provides a clear picture of the company’s financial health, enabling stakeholders to make informed decisions based on the organization's financial performance.

Accurate financial records are critical for compliance with laws and regulations, as well as for internal management to monitor financial stability and growth. By summarizing transactions into financial statements, accounting allows businesses to assess profitability, manage cash flow, and plan for future financial needs effectively.

While marketing, policy development, and human resource management are important aspects of a business, they do not encapsulate the core functions of accounting, which is specifically focused on financial data and its implications for overall business operations.