Accounts definition
/What are Accounts?
Accounts are the financial records of a business. All business transactions are recorded in the accounts, which are then aggregated into the financial statements . The accounts may be examined on an annual basis by auditors , to determine whether an entity's financial statements present fairly its financial results and condition. Depending on the applicable government regulations, a business will probably need to archive its accounts for a number of years, in case there is a tax audit or lawsuit that will require access to the accounts.
Advantages of Accounts
Having a system of accounts (also known as a general ledger) is essential for the proper recordation of business transactions. Without them, there would be no way to organize a jumble of transactions in any meaningful way. With a system of accounts, a business can readily aggregate its transactions into a set of financial statements that reveal its financial results, financial position, and cash flows.
