Mahajani system of accounting is a completely scientific method"". Give your views on it.
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Q. 7
“Mahajani Accounting System is a complete and scientific system”. Express your opinion on this statement.
Answer
Mahajani accounting system is a very old accounting system used in India earlier, it is similar to the double accounting system and has similar process and rules.
Like double accounting system, accounting in it is also done in different stages which are primary accounting where transactions are recorded in Bahis, entries are known as depositing and spending. in the second stages, journal accounts are posted into the ledgers, in mahajani accounting system there are three types of ledgers, personal account, Stock account and profit and loss account.
In the third stage like profit and loss account can be made in P & L perspective and data on the perspective of various financial conditions.
A trail balance sheet is prepared in both the systems and checked by mathematical calculations. Also, profit and loss account are prepared to know the financial position of the business in both the systems.
As this system was similar to the double accounting system we use, it is scientific and complete accounting system.