Published by: BhumiRaj Timalsina
Published date: 20 Jan 2022
A society requires different types of organizations. These organizations are established to achieve specific objectives. In order to achieve the stated objectives, an organization requires utilizing its human, financial and other resources in the best possible manner. For the proper utilization and control of such human, financial and other resources, the organization requires accurate and reliable financial information. Books of account and financial statement are the main sources of financial transaction. These books of accounts and financial statement record summarize and report the financial transactions in a systematic way. Such systematic record of financial transactions helps to supply accurate and reliable financial information to all concerned parties of the business for making appropriate financial decisions.
A business organization performs a large number of financial transactions on a regular basis. These financial transactions relate to buying, paying expenses, receiving incomes, acquiring assets, meeting liabilities and collecting dues. The accountant or owner of the business cannot keep in memory all these transactions. So, such financial transactions are recorded systematically in a set of the book for future reference.
The following are some of the main definitions of book-keeping:
"Book- keeping is the art of recording business dealings in a set of books." -J. R. Batliboi
"Book- keeping is the art of recording transactions in a systematic manner." -Rosenkamp
"Book-keeping is the science and art of correctly recording in books of accounts, all those business transactions that result in the transfer of money or money worth." -R.N. Carter
Accounting is broader than book keeping. Book-keeping is a part of accounting. Book-keeping is concerned only with the systematic record of financial transactions, but accounting is concerned with the act of recording, classifying and summarizing the financial transactions of a business to know its profit or loss and financial position. It is also concerned with the act of communicating the operating results and financial position to all concerned parties of the business. The following are some of the main definitions of accounting:
"An accounting system is a means of collecting, summarizing, analyzing and reporting in monetary terms, information about the business." -R. N. Anthony
"Accounting may be seen as consisting of recording, classification, presentation and interpretation of financial information." -Lewis and Gillespie
The following are the branches of accounting: