Main objectives of accounting are as follows:

•To keep systematic records: Accounting is done to keep a systematic record of financial transactions, like purchase of goods, sale of goods, cash receipts and cash payments. Systematic record of various assets and liabilities of the business is also to be maintained.

•To ascertain the net effect of the business operations i.e., profit or loss of business: We know that the primary objective of business is to make profit and the businessman is very much interested in knowing the same. A proper record of income and expenses facilitates the preparation of the profit and loss account (income statement). The profit and loss account reveals the profit earned or loss incurred by the business firm during a particular period.

•To ascertain the financial position of the business: The businessman is not only interested in knowing the operating result, but also interested in knowing the financial position of his business i.e., where it stands. In other words, he wants to know what the business owes to others and what it owns, and what happened to his capital-whether the capital has increased or decreased or remained constant. A systematic record of various assets and Nature and Scope of Accounting liabilities states the preparation of a statement known as balance sheet (position statement) which answers these questions.

•To provide accounting information to interested parties: Apart from the owners, there are various other parties who are interested in knowing about the business firm, such as the management, the bank, the creditors, the tax authorities, etc.