1.1.2 Functions of Accounting

Accounting function is the intrinsic role of accounting in an enterprise’s operation and management.A correct understanding of accounting function is of great significance to the putting forward of accounting tasks, the determination of responsibilities and authorities of accounting personnel, as well as the full playing of accounting roles.

Calculation function is one of the basic functions of accounting. It runs through the whole process of economic activities. Under this function, by taking money as the measurement unit, it applies certain methods or procedures to record economic activities and carries out necessary calculation, sorting,processing, and summarizing. It aims to turn data into a series of information that could reflect the accounting entity, and to summarize the producing and operating activities and their achievements.

Supervision function is also known as control function. It aims to examine the reliability, validity, and rationality of economic businesses of a specific accounting entity when accounting personnel conduct calculation. Compared to calculation function, it is not only a basic function of accounting, but an important component of the whole economic regulatory system.

In addition, prediction, decision making as well as analysis are all essential components of accounting function.