linkedfoki.blogg.se - Bookkeeping meaning

#BOOKKEEPING MEANING FULL#
#BOOKKEEPING MEANING TRIAL#

He has to keep a check over them and find out their values year after year.

Control over Assets: In the course of business, the proprietor acquires various assets like building, machines, furnitures,etc.

Therefore, the businessman has to know how much he has to pay others.

Calculation of Dues : For certain transactions payments may be made later.

Thus book keeping enables a long range planning of business activities besides satisfying the short term objective of calculation of annual profits or losses. This will enable him to ascertain the growth of his business.

Ascertainment of the Progress of Business: When a proprietor prepares financial statements evey year, he will be in a position to compare the statements.

#BOOKKEEPING MEANING FULL#

Once the full picture (say for a year) is known, this helps him to plan for the next year’s business. Ascertainment of Financial Position: It is not enough to know the profit or loss the proprietor should have a full picture of his financial position in business.Net Result of Business Operations: The result (Profit or Loss) of business can be correctly calculated.This is used to check the arithmetical accuracy of accounts.

#BOOKKEEPING MEANING TRIAL#

Arithmetical Accuracy of the Accounts : With the help of book keeping trial balance can be easily prepared.

Permanent and Reliable Record: Book-keeping provides permanent record for all business transactions, replacing the memory which fails to remember everything. To have important information for legal and tax purposes

To know the names of suppliers and the amount due to them.

To know the names of the customers and the amount due from them.

To keep control on expenses with a view to minimise the same in order to maximise profit.

To keep records of assets and liabilities in such a way that the financial position of the business may be ascertained.

To keep records of income and expenses in such a way that the net profit or net loss may be calculated.

To have permanent record of all the business transactions.

Also read : Accounting Equation Class 11 OBJECTIVES OF BOOK-KEEPING. “Book Keeping is concerned with identifying financial transactions and events measuring them in money terms recording them in the books of account (Journal or Subsidiary Books) in systematic manner and classifying them in ledger”. “Book Keeping is an art of recording in the books of account the monetary aspect of commercial and financial transactions.” “Book-keeping is an art of recording business dealing in a set of books”.