Need for accounting
At the end of the year, all the businessman want to know how much the have gained of lost during the year; how much capital is invested in the business at the end of the year; how much amount the ate liable to pay and to whom they owe it; how much is owned them and by whom etc.In order to attain such of information, it is essential to keep a complete and systematic record of each and every business transaction entered into during the year.
By keeping a complete and systematic record of every business dealing, the business can know how much is the amount of sale; what are his total expenses and what is the amount id profit earned or loss incurred during the year. Furthermore, he can ascertain the financial position of his business, such as, how much capital it has at he end of the year and how that capital stands invested in various assets; how much amount he has to take and from whom and how much amount is liable to pay and to whom.Besides, the properly maintained accounts are helpful i the assessment of Income-tax and Goods and Services Tax (GST) and are accepted as a proof in the court of law whenever needed.
Importance of accounting records is increasing day-to-day. Now-a-days the properly maintain account give the answer of a number questions, such as: what is the cost of production? What should be the selling price based on the cost of production? Thus business owners can take important decision with the help of the information provided by accounting data.
