Maintaining a book of accounts is generally keeping a track or a record of the company transactions, profits, losses and the growth. Maintenance of an accurate and a proper account is very important in a business, as it helps to predict the growth and deprivation within the company. It even assists in predicting the future of a company as well as in telling the current financial position of the firm. It is mandatory to maintain a book of accounts and a companyâ€™s book of accounts is said to be maintained flawlessly, if it satisfies the below conditions.
- They should be maintained according to the double entry systems.
- It should provide an accurate view of the companyâ€™s internal and external affairs such as its relationship with its competitors and opponents.
The company should maintain a proper record of all the happenings within the company and imprisonment or penalty of up to five lakh rupees can be charged for skipping this process. It is the duty of the managing director of a company to check on these recordings else they will have to face unfortunate mishaps in the future. One can seek professional assistance for a clear and a flawless maintenance of this book of records. Finance and Accounting students will come across this topic on how to efficiently record and manage accounts.
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