Stages of Accounting “

Accounting has the following stages:
(i) The transactions of a business that have, at least in part, a financial character are identified and recorded.

(ii) The recording is done in a manner which identifies the different classes and types of transactions.

(iii) The resulting records are summarized in such a way that the owners or other interested parties in the business can see the overall effects of all the transactions. The statements prepared by the summarizing process are known as financial statements which will show the profit or loss made by the business over a period of time and the total capital employed in the business. Such financial statements are used by management to make business decisions.