1) To keep systematic and complete records of financial transactions in the books of
accounts according to specified principles and rules to avoid the possibility of omission
and fraud.
2) To ascertain the profit earned or loss incurred during a particular accounting period
which further help in knowing the financial performance of a business.
3) To ascertain the financial position of the business by the means of financial statement i.e.
balance sheet which shows assets on one side and Capital & Liabilities on the other side.
4) To provide useful accounting information to users like owners, investors, creditors,
banks, employees and government authorities etc who analyze them as per their
requirements.
5) To provide financial information to the management which help in decision making,
budgeting and forecasting.
6) To prevent frauds by maintaining regular and systematic accounting records.
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