Advantages of Accounting :
Advantages of Accounting :
Accounting, as we know it is the systematic record ef basiness transactions of Advantages of Accounting :(Accounting, as we know it is the systematic record ef basiness transactions of financial nature with a view of understand the result of the business, revjew the economic situations and to .terpret the performance
1. Replacing Memory:
Business transactions are innumerable, varied and complex as cuch ie le quite impossible to memories each and every transaction. Accounting records these transaction in writing and thus, it is not necessary that the businessman should memorise all the transactions A.
Calculating the Performance of Business :
(Accounting keeps proper and systematic record of all business transactions. Income statements are prepared with these records and we are able to know the profit earned and loss suffered by the business.)Trading account is prepared to find gross profitior loss of the firm. Net profit can be known by preparing profit and loss account. N3.
Documentary Evidence :
Accounting records can be used as an evidence in the court to substantiate the claim of business. These records are based on documentary proof. Every entry is supported by authentic vouchers. This is why, the court accepts these records as evidence. V4.
Assessing the Financial Position of the Business : Financial position of the business is displayed through position statement i.e. balanace sheet of the business. The statement is prepared at the end of the accounting year and reflects the true position of assets and liabilities of the business on a particular date.
V5. Help in Comparative Study : When a business concern has record of the transaction of 1 business for every year, it can compare the result of its business from vear to year and ascertain uie progress of its business. nature with a view of understand the result of the business, revjew the economic situations and to .terpret the performance 1.
Replacing Memory: Business transactions are innumerable, varied and complex as cuch ie le quite impossible to memories each and every transaction. Accounting records these transaction in writing and thus, it is not necessary that the businessman should memorise all the transactions A.
Calculating the Performance of Business :(Accounting keeps proper and systematic record of all business transactions. Income statements are prepared with these records and we are able to know the profit earned and loss suffered by the business.)Trading account is prepared to find gross profitior loss of the firm. Net profit can be known by preparing profit and loss account. N3.
Documentary Evidence : Accounting records can be used as an evidence in the court to substantiate the claim of business. These records are based on documentary proof. Every entry is supported by authentic vouchers. This is why, the court accepts these records as evidence.
V4. Assessing the Financial Position of the Business : Financial position of the business is displayed through position statement i.e. balanace sheet of the business. The statement is prepared at the end of the accounting year and reflects the true position of assets and liabilities of the business on a particular date.
V5. Help in Comparative Study : When a business concern has record of the transaction of 1 business for every year, it can compare the result of its business from vear to year and ascertain uie progress of its business.
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