Explain briefly any six advantages of accounting.
Explain briefly any six advantages of accounting.
The various advantages of accounting are as follows
(i) Financial Information about the Business: Accounting provides the financial information about the business to people, inside and outside the business.
(ii) Replaces Memory: A systematic recording of transactions removes the necessity to remember the transactions. Thus, accounting replaces memory by providing accounting information as and when needed.
(iii) Facilitates Comparative Study: A systematic recording of business transactions enables a businessman to compare the current year's results with those of past years. It also helps him to compare the performance of his business with that of other business.
(iv) Facilitates Settlement of Tax Liabilities: A systematic accounting record helps in the settlement of various tax liabilities such as income tax, sales tax, VAT, excise duty, etc.
(v) Facilitates Raising Loans: Accounting makes available the information with respect to the performance of the business. Banks and financial institutions grant loans on the basis of this information.
(vi) Acts as an Evidence in Court: Systematic recording of transactions acts as a valid evidence in the court.
The various advantages of accounting are as follows
(i) Financial Information about the Business: Accounting provides the financial information about the business to people, inside and outside the business.
(ii) Replaces Memory: A systematic recording of transactions removes the necessity to remember the transactions. Thus, accounting replaces memory by providing accounting information as and when needed.
(iii) Facilitates Comparative Study: A systematic recording of business transactions enables a businessman to compare the current year's results with those of past years. It also helps him to compare the performance of his business with that of other business.
(iv) Facilitates Settlement of Tax Liabilities: A systematic accounting record helps in the settlement of various tax liabilities such as income tax, sales tax, VAT, excise duty, etc.
(v) Facilitates Raising Loans: Accounting makes available the information with respect to the performance of the business. Banks and financial institutions grant loans on the basis of this information.
(vi) Acts as an Evidence in Court: Systematic recording of transactions acts as a valid evidence in the court.
