Why you need Accounting ?
1. It helps in the preparation of financial statements.
2. Accounting information is also used to compare the result of current year with the previous year to analyze the changes.
3. It helps the managers in the decision making process.
4. It provides information to other interested parties such as shareholders, creditors, investors, customers, government, employees.
5. It helps in taxation matter.
6. Accounting information can be produced as evidence in the legal matter.
7. It helps in valuation of business.
1. The items expressed in monetary terms are recorded in the accountings where as the items which are nonmonetary nature not recorded.
2. Sometimes accounting data are recorded on the basis of estimates and which could be inaccurate.
3. Fixed accounting are recorded as the original cost.
4. Value of money does not remain stable so accounting value does not show true financial results. 5. Accounting can be manipulated and biased.
Documents Required For Accounting
- All vouchers
- All bank statements
- All Invoices