What is the primary function of accounting in business?

• A. It manages marketing efforts
• B. It tracks employee performance
• C. It communicates results to decision makers
• D. It develops new product strategies

Answer: (C)

The primary function of accounting in business is to communicate results to decision makers. This involves the systematic recording, reporting, and analysis of financial transactions of a company. Accounting provides crucial information about the financial performance and position of a business, which is used by management, investors, creditors, and other stakeholders to make informed decisions.

This communication typically takes the form of financial statements—such as the income statement, balance sheet, and cash flow statement—which summarize the financial data in a clear and structured manner. By presenting this information, accounting helps to ensure that decision makers are aware of the company’s financial health, profitability, and cash flow situation, allowing them to make strategic choices that align with the organization’s objectives.

While the other options may represent important activities within a business, they do not encapsulate the fundamental role of accounting. Marketing management, employee performance tracking, and product development strategies are all essential functions but are more focused on operational aspects rather than the financial insights that accounting provides to drive overall business decisions.