Book-keeping is the branch of knowledge, which tells us how to keep financial transactions. Each business deals a number of financial transactions daily, which can be expressed in monetary value. In order to find out the profit or loss of the business, it is essential to keep a complete systematic record of these business transaction’s.
Objectives of Book-keeping
- To keep a systematic, scientific and permanent record of all financial transactions.
- Help to ascertain the profit or loss made by a firm over any given period.
- Help to disclose the financial position of the business on any given date.
Importance of Book-Keeping
- It provides necessary information for future reference.
- It helps to determine profit or loss of a firm made during a year.
- It helps to prepare balance sheet, which shows the assets and liabilities of a concern during the year.
- It provides the evidence to settle the disputes between creditors and debtors.