Proper Accounts

It is all the more necessary for an organisation or a concern to keep proper accounts. At the end e the year the true result of the economic activities of a concern must be made available otherwise it will nc be possible to run the concern. In case of a business concern the profit or loss at the end of a year must b ascertained, because, the amount of profit must be adequate in relation to that of investment made in th business. If it is not so or if there is a loss, it is an indication of some defects existing somewhere in ft management of the business. All such defects need to be detected and analysed and appropriate measure taken for their, rectification, but it is only possible, if proper books of accounts are maintained in th business concern. So, the importance of book-keeping to a business is the same as that of fresh air to > man to exist. Without book-keeping records a business would meet death, though not instantly, but m \ short time.

; Moreover, if proper books of accounts are not kept in a business, the amount of profit cannot I ascertained and it.will not be possible to distribute the profit among the owners of the business. The incon tax dues to the Government cannot also be paid. In the absence of books of accounts misuse or defalcatia of money will remain undetected. The owner and other parties interested will not. be able to have aq information about the condition of the business. For the same reason in the case of non-trading concert like, schools, clubs, colleges, universities, hospitals etc. the need for accounting is universally recognised. . Thus we see that the necessity of keeping accounts is not only confined to business concerns but is also useful for ail classes and grades of people and organisations.