Advantages of Approaches of Recording in Accounting Transaction

Advantages of Approaches of Recording in Accounting Transaction

Advantages of Approaches to Recording in Accounting Transaction

The advantages of this system are as follows:

Scientific system: This is the merely systematic method of recording business transactions. It helps to attain the objectives of accounting.

The complete record of transactions: This method sustains an entire record of all business transactions.

A check on the correctness of accounts: By the employ of this method the correctness of the accounting work can be established by the preparation of trial balance.

Ascertainment of profit or loss: The profit earned or loss occurred throughout a period can be ascertained by the preparation of profit and loss account.

Awareness of the financial situation: The financial situation of the apprehension can be ascertained at the end of every stage through the preparation of balance sheet.

Proportional study: The results of one year may be compared with those of earlier years and the reasons for modify may be ascertained.

Helps in assessment making: The management may be competent to get enough information for its work, particularly for making decisions. Weaknesses can be detected and corrective actions may be applied.

Detection of fraud: The methodical and systematic recording of business transactions on the source of this method reduces the probability of fraud.

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