Why do businesses keep accounts?

In earlier article, we understand the terms: accounting,accounts & bookkeeping, next is what are the major reasons for keeping accounts?Some major reasons for businesses to keep accounts are as follows:-

  • Keeping track of money by showing where it came from and how it has been spent
  • By producing accounting information, these accounting records are translated into useful information to effectively and efficiently run a business for example keeping records of the businesses’ fixed assets to safeguard its assets or maintaining expenses records to ensure correct amounts are paid correctly and at the correct time
  • As businesses are getting more complex like for example it is no longer the sole proprietorship type instead we have now many public listed entities
  • Many users would want businesses to keep accounts like for example Inland Revenue, Securities Commission,etc

{ click here to the Content Page on Introduction to Accounting }

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