Need, Importance and Objective of Accounting

We live in a world where people need things from the day they are born to the day that they die. Some of these needs 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 needs businessman perform useful services to their fellow humans. In return they expect to earn a reasonable reward for their efforts in the form of profits.

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 expenditures helps to ensure proper use of our income. 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 a written record of our income and expenditure. The idea behind maintaining such record is to know the correct position regarding income and expenditure. The need for keeping a recordof income and expenditure in aclear and systematic manner has given rise to the subject of "book-keeping".

Watch the following Video lecture for better understanding.

It is all the more necessary for an organization or a concern to keep proper accounts. But it is only possible, if proper books of accounts are maintained in the business concern. So, the importance of book-keeping to business in the same as that of fresh air to the a man to exist. Without book-keeping records a business would meat death, though not instantly, but in a shirt time.