Explains the factors which necessitated systematic accounting

Explanation

The factors that necessitated systematic accounting area unit given below:

(a). Solely money transactions area unit recorded: Those events that area unit money in nature area unit solely recorded within the books of accounts. for instance, earnings of associate worker is recorded within the books however not recorded instructional qualification.

(b). Transactions area unit recorded in financial terms: solely those transactions which might be expressed in monetaiy terms area unit recorded within the books. for instance, if a business has 2 buildings and 4 machines, then their financial values is recorded within the books, i.e. 2 buildings cost accounting ? 20,000, four machines cost accounting ? 8,00,000. therefore the whole price of assets is ? 8,20,000.

(c) . Art of recording: Transactions area unit recorded within the order of their prevalence (Date, wire).

(d). Classification of Transaction: Business transactions of comparable nature area unit classified and announce beneath their various accounts. for instance, all the transactions about machinery are going to be announce within the Machinery Account.

(e). Summarising of data: All business transactions area unit summarized within the variety of balance, mercantilism Account, Profit and Loss Account and record that gives necessary data to numerous users.

(f). Analysing and deciphering data: Systematic accounting records alter users to analyse and interpret the information in a very correct and acceptable manner. These information and data area unit conferred within the variety of graphs, statements, charts, that results in straightforward communication and perceive ability by varied users. Moreover, this facilitates in higher cognitive process and future predictions.