THE IMPORTANCE OF PROPER ACCOUNTING IN MODERN DAY BUSINESS
CHAPTER ONE
INTRODUCTION
In this day of trade and commerce, many enterprises are springing up. For instance. Sale proprietorship Partnership Corporative, limited liability company Being established for the purpose of achieving objective as it related to their businesses.
These businesses have one thing in common and that is they all employ the factors of production land, capital, labour and entrepreneurship for the achievement of their various objectives. These objectives could be effectively and efficiently achieved if these very important tools are properly managed. A good and efficient business done not end with the profit made but ought to be sustained to ensure a more regular flow of income and subsequent profit. The sustainability of a good business depends on a number of factors the location of the business (which includes the land) environment, proximity to the required raw material and the targeted end users, and more importantly, funds. A good business can only thrive if the effective human resources are employed. Therefore it is necessary to ensure that a proper qualified workforce is employed to enhance productivity.
Another factor that will enhance the productivity and profitability of a good business out fit is proper accounting. If proper accounting procedures is employed in a business, waste of funds. Time and materials will be minimized. Although it is the duty of every employee in a business outfit to imbibe the culture of maintenance and accountability, the accountant has a greater put to play in this aspect of the business. Proper accounting is the hallmark of any business and it cuts across every segment of the business from the security gate to the office of the Chief executive. In modern day business proper accounting is very beneficial and rewarding. It appraises, revaluates and checks the amount of capital invested, as well as revenue and expenditure that occur during the business financial year. With this profit and loss account is brought also into consideration, where proper accounting has not been introduced in a business, there is bound to be some irregularities. The income and expenditures would not be accurately recorded thereby making it difficult for the actual profit to be ascertained. The importance of proper accounting in modern day business cannot be overemphasized because it definitely has a positive effect of the workforce. The work force will be more careful, cost conscious and committed to the business, profit will increase and waste minimized.
1.1 BACKGROUND OF THE STUDY
Business is the exchange of goods, services and money on an arm’s length basis, that result in mutual benefit or profit for both parties involved. An individual engages in business because he or she believes that the rewards or possible benefit of business are greater than the risks or possible future sacrifices of business.
Accounting is often said to be the language of business it is used in the business world to described the transaction entered into by all kind of organization. The actual record making phase of accounting is usually called bookkeeping and he use to which these record are pt, their analysis and interpretation. An accountant should be interested in relationship between the financial results and the events which have created them.
The owners of a business would want to know Whether or not the firm operating at a profit Where or not the business will be able to meet its commitment as they fall due, or have to close down owing to lack of funds Whether documentary evidence of the company business activities can be maintained. The tool for a successful proper accounting report called financial statement that describes the financial position of a business and the result of its recent operation. A complete set of financial statement for a business include fair related accounting report:A balance sheet. This is the statement that shows the financial position of the business at a specific date by describing its financial resources and obligations.
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