What is the primary purpose of accounting in business?

The primary purpose of accounting in business is to provide financial information that is useful for decision-making. This function is critical because it enables stakeholders, such as management, investors, and creditors, to evaluate the company's financial health and performance. The data generated through accounting helps these parties make informed choices regarding investments, resource allocation, budgeting, and overall strategic planning.

Financial statements and reports, which are outputs of the accounting process, summarize key information about a company's financial position, including its assets, liabilities, revenue, and expenses. This comprehensive financial information serves as the basis for assessing profitability, liquidity, and operational efficiency, thereby facilitating effective decision-making at all levels of the organization.