Question

Which of the following is/are the main function of accounting?
1. Allowing credit to customers
2. Ascertaining operational profit or loss
3. Providing leadership to accounting staff
Select the correct answer from the options given below.

• A. 1 & 3
• B. 2 only
• C. 1, 2 & 3
• D. None of the above

Answer 1

Answer: (B)

2 only

Accounting is done to record all the business transactions. It is basic motive of any business to earn profit. At the end of a specific period, normally financial year, accounting records are summarized to make profit & loss account. It is basic function of accounting to ascertain operational profit or loss.