Step1:finanical information is necessary in order to run a business in an efficient manner.Reliable information will be available only trough keeping proper of accounts.
Step2: proper accounting is essential , if money is to be borrowed for the purpose of business.The lender will only agree to lend money when he is satisfied as to the solvency of the borrower.Information available from books of accounts is the means of measuring such solvency.
step3:cash in hand can verified and any defalcation can be detected ,if proper books of accounts are maintained.
step4: payment of sales tax and income tax is only possibile if bools of accounts are maintained.
step5:In case of any dispute , books of accounts can be produced in the court of law as a documentry evidence.6: Goverment Fixes up fair prices,formulates industrail policy ,prepares economic plans , decides import -export quotas and does many other functions on the basis of accounting information available from the books of accounts
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