How is accounting subject helpful in a business organsation
How is accounting subject helpful in a business organsation
January 21, 2018
Posted By : Muskan Sehgal
Comments Off on How is accounting subject helpful in a business organsation
Accounting… hm!?!? How is accounting subject necessary to be taught in BBA? How does or what help does accounting do in a business organisation or in a business enterprise or in a business administration?
Accounting plays an important role in BBA, though every subject changes in every semester, but accounting is the one which remains in all the semesters, like financial accounting, management accounting, cost accounting, etc.
Accounting subject has a wide scope in the career line as a chartered accountant. Accounting is basically all about keeping records of all the financial transactions made over a period of time in the following business enterprise, or a business organisation or a business administration. It takes a very important place in the commerce industry as each and every business organisation or business enterprise or business administration wants to know about how much profit it has earned or how much loss has been suffered by the business enterprise or business organisation or business administration in the end of a financial year which can be taken out through those financial transactions recordings. Plus this subject helps us to record each and every financial transaction made by the business so that one should be aware of the transactions made by the business and nobody could point on you regarding it as those transactions act like a legal document or an evidence to save you.
But the question arises
Why is recording every financial transaction being made from a business enterprise, or a business administration, or a business organisation so necessary?
Human Memory: let’s take an instance, if you own a shop, it’s difficult to remember how many people have lend the goods and will pay after a month. Even if you have a strong memory, it’s still difficult to remember for how many have paid the money and for what, and how many have to pay and but have taken the product from you. So you see writing every financial transaction which is been made or yet to be made is necessary in a business enterprise or one can suffer losses due to it. But on the other hand if you start writing these things out, one knows whose payment is due and who has paid for what product, and you won’t suffer loss due to it. So it’s difficult to remember a lot when you have too many number of customers to deal with, so this is the reason recording every transaction is necessary for the following person so that he or she may not suffer losses inn his or her business. Every business organisation or business administration or business enterprise must note down the business transactions made, so that he or she would be knowing how much they have paid or earned through the export import etc. Because if you are not recording the financial transactions and the pending transactions then you never know if somebody would be purchasing all the goods and services from you at free of cost which would obviously lead to a huge loss to you and your business enterprise. Though even if you have a strong memory its hard to remember all the transactions which have been made and are pending by the customer’s side or the products pending to deliver by your side. So recording each and every financial transaction made by the business is very important and necessary or else the business enterprise or the business organisation or the business administration can lead towards loss.
Evidence: when you note down every financial transaction being made by the business or record each and every financial transaction being made by the business, it acts like or becomes an important evidence, if one raises his or her hands over you as an action of being against you, then you certainly have the evidence of very financial transaction being made, and get back to them easily. As you have the evidence you can relax and work stress free, as to if somebody points at you, you certainly have the transactions recorded with you. As now you have each and every financial transaction made by the business recorded with you, nobody can mess up with you as you have an evidence to protect yourself and protect your organisation.
Legal documents: When you are running a business, tax, and etc. are required. At that time, your recordings play a major role. Not only this, sometimes your recordings do become or act as a legal document for a proof where you have made our transactions and etc. For example, if someone brought up a case against you regarding some transaction then your recordings act or becomes the legal documents of the case. No one can point a finger against you if you have recorded each and financial transaction of your business as to if somebody tries to mess up with you, you know how to deal with that person, as to you have a proof of the following transaction made by the person or made to the person so here that financial transaction acts as an important legal document.
Profit and Loss: When you are working in an enterprise or running an enterprise, you are eager to know at the end of a financial year about how much profit or loss has your company made? And what were the reasons behind it? Through recording of financial transactions one can figure out the results of whether the company has made the profits or losses in that particular financial year. Because everyone wants to know how much benefit has been generated in this financial year, or how much loss has been suffered by the business this financial year. So that one could work on the following things lacking behind and pickup there full speed to ride on a successful road or track so that he or she could earn profits in the upcoming financial years. Because at the end everyone wants to generate more of a profit and less of a loss actually not a bit of a loss, so through financial recordings one can come to know about the goods and services or at the things where he or she is lacking behind and work on it so that his or her business could hit the boom that is work on the steps of success and reach out its goals and try its best actually give its 100% best to accomplish those goals. This is how accounting works.
And there are many other numerous reasons behind recording every financial transaction when you are running a business enterprise or a business organisation or a business administration. Accounting plays a major role, without it a business man or a business woman can suffer losses. As to accounting teaches the basic things of how to work or run a business enterprise or business organisation or business administration. It talks about the basic features of a business which looks small but plays a major role in the Business World and acts like a shield to your business enterprise or business organisation or business administration. So accounting subject is like a very important pillar in the commerce industry. And this is the reason why this subject is being taught in the stream of BBA i.e. Bachelors of Business Administration.