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Objectives of preparing books of accounts:
* Recording and control of business transactions.
* To maintain accuracy in recording - double-entry is regarded as the most accurate method of bookkeeping, because each transaction is entered in the books twice.
* To meet the requirements of the law- the law , in the form of the companies Acts, state that companies must keep proper records of their transactions and send their shareholders a set of final accounts.
* To present final accounts to the owners of the business( financial statements).
* To present other financial reports and analyses e.g use of ratios to evaluate the solvency and liquidity position.
* To facilitate the efficient allocation of resources
the books of accounting is prepared in order to keep all information that can be used in detecting errors and fraud, it is also prepared in order to show the evidence of all transaction done with in period of time.
The objectives of booking transactions can be summarized in two points :
The first is to meet the legal requirements.
The second is to serve the different users of this information such as the owners,investors,creditors ,employees and other stakeholders .
Major purposes for preparing books of accounts
1). CASHIN CASHOUT of the organization
2). Financial healthiness of one's own treasury
3). Monitoring and maintaining consistency in balance sheet
4). It gives a vision to fulfil the financial mission of the organization
5). To plan and visualise where to invest and how to retrieve ROI
6). how to curb the overdrafting
7). In what way to motivate the employees with appropriate bonus, perks etc
8). How much to invest on R&D, to invest in the market
9). Be proactive for the contigency plan and unforeseen expenses
10). Overall its a Financial log book with control chart.
Bookkeeping is usually done by means of a bookkeeper. A bookkeeper (or book-keeper) is someone who records the everyday economic transactions of a enterprise. He or she is usually answerable for writing the daybooks, which include records of purchases, sales, receipts, and bills. The bookkeeper is liable for making sure that every one transactions are recorded in the best daybook, supplier's ledger, purchaser ledger, and preferred ledger; an accountant can then create reports from the records regarding the financial transactions recorded via the bookkeeper.
The bookkeeper brings the books to the trial stability stage: an accountant may additionally prepare the earnings declaration and stability sheet the usage of the trial stability and ledgers prepared with the aid of the bookkeeper
Maintain the transaction records,met the legal requirements,Helpful for multiple reporting & to know he financial position of the business.
Most importantly to know the financial position of company.
