book-keeping – meaning and objectives

book-keeping is science and art of correctly recording in the books of accounts, all those business transactions and events in set of books, as and when such transaction take place. it is systematic recording in terms of money in the set of books.

the following are the main objectives of book keeping

  • to exercise effective control on various expenses, income earned over business assets, business liabilities
  • to know various business assets and liabilities
  • to maintain permanent records of the business transactions
  • to ascertain the profit earned or loss suffered during the accounting period
  • to know amount due to business from the customers
  • to know the amount payable to suppliers
  • to know various taxes and duties payable to government
  • to detect and prevent errors and frauds commited by employees and other person
  • to provide valuable informations for taking various decisions
  • to compare and measure the efficiency of the business against other business in the same industry
  • to review the progress of the business from year to year