IMPORTANCE OF ACCOUNTING 2009

IMPORTANCE OF ACCOUNTING:
We live in a world where people need things from the day they are born to the day that they die.
imk of these 'needs' are physical needs, a need for goods of various sorts, food, clothing, shelter, and so Some of them are emotional 'wants', a need for education, entertainment, or recreation. In satisfying needs businessmen perform useful services to their fellow humans. In return they expect to earn noble reward for their efforts in the form of profits.
Cutyour coat according to your cloth".-- so goes the saying. Even a king becomes a pauper, if"
h feb to exercise economy in his expenditures. In other words, every individual will have to plan his according to his income. Obviously the question arises -- why is this planning necessary? The
of such planning arises as our wants or desires or needs for goods and services are unlimited, while cans, i.e. the income with which to buy such goods and services are limited. Where, however, goods services are available free of cost, i.e. gifts of nature, such as ajr, water (not in cities) etc., there is no of economy. But the necessity of economy is undeniable, where goods or services are not available fat of cost and their supply is limited. A proper and fair planning of expenditures helps us to ensure proper use of our income. Of course, s rue that the quantity of goods or money cannot be increased by making a proper planning. But crainh we can ensure most economic use of goods or money at our disposal.
Most of us do maintain some kind of a written record of our income and expenditure. The idea tetrad maintaining such record is to know the correct position regarding income and expenditure. The need r keeping a record of income and expenditure in a clear and systematic manner has given rise to the - jcct of 'book-keeping1. Some individuals do not recognise the necessity of keeping accounts of their day-to-day •peaditures, since they spend their own income and are not required to account for it to anybody else. But not an idea is wrong. A family, however, small it may be, must exercise proper control over its ipcnditures so as to ensure future security. A family has two-fold responsibilities - one is that of ensuring id welfare of the family and the other is the social responsibility. Needless to say, money is the most sentiat pre-request for ensuring peace and happiness of a family, which each and every member desires.The quantum of money must be adequate in relation to the needs. But mere adequacy of money will not do; cae has to take care of its proper utilization. For this it would be necessary to exercise economy and certain proper books of account. On the other hand each and every family must save a portion of its income for future contingencies. It is possible to increase the amount of saving through proper management nid effective control of the family expenses. Through such saving the family helps materialising theeconomic planning of the country.its totally