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Class : 11
Unit : Account

Write any five importance/advantages of book-keeping.

Ans : Any three importance of book-keeping are as follows:- a. Provides financial information:-Book-Keeping can provides financial information and data needed for planning, budgeting and forecasting. b. Helpful in ascertaining profit or loss:-Book-Keeping keeps complete records of business transactions. Thus, profit or loss from business transactions can be easily ascertained. c. Knowledge of financial position:-With the help of recorded financial transactions under book-keeping, a true and correct financial position of a business concern can be known at only time. d. Helpful in detecting and preventing of errors and frauds:-Under book-keeping, all the financial transactions are recorded systematically. Since, it helps to identify and prevent mistakes and frauds. e. Helpful in determining tax burden:-A business concern is required to pay Value added tax (VAT) and Income tax etc. to the government. Such tax burden can be easily determined with the help of book-keeping.
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