Is maintaining of accounts necessary?
Hello friends, Sometimes, people ask me whether it is necessary for them to maintain accounts of their business. I reply them that without maintaining accounts how it is possible for them to know exactly what is the financial position of their business. Therefore, any businessman must maintain the below mentioned account books: Cash book: It is necessary to maintain cash book to know the exact position of the cash balance. Bank book: Similarly, bank book is necessary to know the exact bank account balance. Ledger accounts: Ledger is necessary to know the outstanding amount due to suppliers as well as outstanding amount receivable from customers. Ledger accounts of expenses are necessary to know the exact amount of each and every expense head. Profit & Loss Account: This account is necessary to know the exact amount of profit or loss at the end of the year. Balance Sheet: The balance sheet is necessary to know the liabilities and assets of business at the end of the...