Are you curious to know, as to, what are the main objectives of bookkeeping? So, let us see the content.
The main objectives of bookkeeping would include identifying the financial transactions, recording such transactions, maintaining the books of accounts, to ascertain the impact of recorded transactions on financial statements..
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Bookkeeping is the art of recording business transactions in a systematic manner. It is the recording phase of the accounting system. It includes maintaining books of accounts and completing the payroll
what are the main objectives of bookkeeping?
Let us see the main objectives of bookkeeping which are listed below. They are:
- To identify the Financial transactions: The objective of bookkeeping is to identify the financial transactions that are monetary in nature and to record them in books of accounts. The primary objective is to identify the financial transactions and record them in books of accounts accordingly.
- The Complete Record of Financial transactions: The important objective is the complete record of business transactions in a systematic & logical manner. It is the essential objective to record the business transactions in the books of accounts to facilitate the preparation of financial statements and to know the financial performance & position.
- To Maintain the Books of Accounts: The important objective is to maintain the relevant books of accounts by the bookkeeper in safe custody. He is responsible for storing, safekeeping, safeguarding all the books of accounts including vouchers, source documents, journal, ledger, other books of accounts in a safe place.
- To Classify and Balance the Ledger accounts: The objective of bookkeeping is to classify the accounts as an expense, income, asset, liability and balance the ledger accounts as well. The accounts are classified as assets, liabilities, expenses and incomes accordingly.
- To make accounts reliable, accurate and authentic: The objective of bookkeeping is to make the accounts reliable accurate and authentic. To make the books of accounts accurate with useful financial information
- To ascertain the effect of Recorded Transactions on Financial statements: Finally, the objective is to ascertain the effect of the recorded transactions on the financial statements. This helps in recording the accurate financial data in the financial statements to depict the correct financial performance and financial standings of the business entity. Thus the main objective of bookkeeping is mainly concerned with recording the financial transactions in books of accounts in a systematic and logical manner.
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