ACCOUNTING, OBJECTIVES OF ACCOUNTING
MEANING OF BOOK-KEEPING: Book-keeping is an art how to maintain the books of account. It is the systematic way of recording the business transactions. A book-keeper may be responsible for the keeping all the financial records of the business. Book-keeping is the primary stage of accounting. We can say that book-keeping is the basis of accounting.
According to Prof. Carter,“Book-keeping is the science and art of correctly recording in books of accounts, all those business transactions that result in the transfer of money or money’s worth.”
MEANING OF ACCOUNTING: Accountancy begins when book-keeping ends. Accounting is an art of recording, classifying, summarising the business transactions or events which are part of financial and interpret the result. The work of an accountant is to analyze, interpret and review the accounts and draw conclusions and make the future policies for the business.
According to R.N Anthony,” A mean of collecting, summarizing, analyzing and reporting in monetary terms, information about the business.”
OBJECTIVES OF ACCOUNTING:
- To Keep Systematic Manner: The First objective of the accounting is kept all the account in a systematic manner. Accounting is helpful for the keep all records in a systematic manner. An accountant uses many ways for the keep all the accounts of a business or corporation
- To Find Out the Profits and Losses: Accounting is a very helpful process for the find out and checks all profits and losses in particular company or an organization. Accounting is the language of business. It not only keeps a systematic record of all financial transactions of business but keeps the record of income and expenses.
- To Control and Protect the Business: accounting have the next objective is to control and protect the all business or an enterprise through the various modes or way of transactions in the accounting system. Through accounting, a business can easily check about the future related profit and losses.
- To find out the financial Position of business: Accounting is very helpful to find out the financial position of a specific business through the account books. An accountant uses all the accounting books which are helpful for checking the all financial position of the business. At the end of the financial period, every business makes the Balance sheet for the check all assets and liabilities which shows the financial position of a business.
- To ascertain the amount Payable or Receivable: Books of accounts are very efficient for the find out the amount payable or receivable because all data is entered by an accountant in that books are related to the all business activities which shows that particular amount that payable or receivable by the business.
- To facilitate the rational decision making: Various decisions regarding business or for an enterprise are decided by the accounting of the business because without accounting business can’t manage easily. A good decision for a business is good for the better result in the business.
- To have valuation information: Accounting provides the valuation information to investors, creditors, customers, govt., search scholar etc. Investors can judge their worth; creditors can check credit-worthiness; govt. use for better taxation and customers use for the lowest price.