Write in brief,the essential of maintaining books of account in a business
Answers
Answer:
Explanation:
A business is profit taking concern. It performs number of financial transactions for the purpose of making profit. It buys and sells goods and services for cash and on credit. It acquires different types of asses for generating revenue and disposes them when they became useless. It borrows and provides different kinds of loans. It makes several types of expenses and earns revenue from different sources. At the end of the period, it needs to know the result of business operation i.e. profit or loss and financial position i.e. assets and liabilities. Similarly, it needs to know the amount of payable to other and receivable from other and when they are due. Business needs all these kinds of information for taking several decision and actions. Book keeping and accounting provides such information for that purpose. That is why maintaining the book of account is essential in business.