NEED AND IMPORTANCE OF ACCOUNTING

    NEED AND IMPORTANCE OF ACCOUNTING

WE LIVE IN A WORLD WHERE PEOPLES NEED THINGS FROM THE DAY THEY ARE BORN TO THE DAY THAT DIE SOME OF THESE NEED ARE PHYSICAL NEEDS, A NEED FOR GOODS OF VARIOUS SORTS, FOOD, CLOTHING, SHELTER, AND SO ON. SOME OF THEM ARE EMOTIONAL WANTS, A NEED FOR EDUCATION, ENTERTAINMENT, OR RECREATION. IN SATISFYING SUCH NEED BUSINESSMEN PERFORM USEFUL SERVICES TO THEIR FELLOW HUMANS. IN RETURN THEY EXPECT TO EARN A REASONABLE REWARD FOR THEIR EFFORTS IN THE FORM OF PROFITS.

     CUT YOUR COAT ACCORDING TO YOUR CLOTH SO GOES THE SAYING. EVEN A KING BECOMES A PAUPER IF HE FAILS TO EXERCISE ECONOMY IN HIS EXPENDITURES. IN OTHERE WORDS, EVERY INDIVIDUAL WILL HAVE TO PLAN HIS EXPENDITURE ACCORDING TO HIS INCOME OBVIOUSLY THE QUESTION ARISES—WHY IS THIS PLANNING NECESSARY? The NEED FOR SUCH PLANNING ARISES AS OUR WANTS OR DESIRES OR NEEDS FOR GOODS AND SERVICES ARE UNLIMITED, WHILE THE MEANS, I.E. THE INCOME WITH WHICH TO BUY SUCH GOODS AND SERVICES ARE LIMITED. WHERE, HOWEVER GOODS AND SEVICES ARE AVAILABLE FREE OF COST FOR EXAMPLE GIFTS NATURE, SUCH AS AIR, WATER (NOT IN CITIES) ETC, THERE IS NO QUESTION OF ECONOMY. BUT THE NECESSITY OF ECONOMY IS UNDENIABLE, WHERE GOODS OR SERVICES ARE NOT AVAILABLE FREE OF COST AND THEIR SUPPLY IS LIMITED.

      A PROPER AND FAIR PLANNING OF EXPENDIUTERS HELPS US TO ENSURE PROPER USE OF OUR INCOM. OF COURSE, IT IS TRUE THAT THE QUANTITY OF GOODS OR MONEY CANNOT BE INCREASED BY MAKING A PROPER PLANNING. BUT CERTAINLY WE CAN ENSURE MOST ECONOMIC USE OF GOODS OR MONEY AT OUR DISPOSAL.

    MOST OF US DO MAINTAIN SOME KIND OF WRITTEN RECORD OF OUR INCOME AND EXPENDITURE. THE IDEA BEHIND MAINTAINING SUCH RECORD ISTO KNOW THE CORRC POSTION REGARDING INCOME AND EXPENDITURE. THE NEED FOR KEEPING A RECORD OF INCOME AND EXPENDITURE IN A CLEAR AND SYSTEMATIC MANNER HAS GIVEN RISE TO THE SUBJECT OF BOOK- KEEPING.

SO ALL ABOVE REASONS WE HAVE VERY MUCH NEED OF ACCOUNTING IN ALL ACTIVITES OF OUR LIFE.