User:Dr. Ranju Sobti/sandbox

Accounting: An Introduction For a business man there is need of accounting to know about the amount of purchases made during a period, amount of sales, amount of expenses incurred, amount of net profit or loss, capital invested, amount of liability to pay, amount invested in assets and many mores. Besides, accounting is helpful in assessment of income tax and GST. Accounting is also accepted as evidence in the court of law in case of any dispute. Only financial transactions are recorded in accounting, all those transaction which can not be measured in terms of money like good or bad relations among the employees may impact the net profit of the enterprise but could not be recorded in the accounting. All similar business transactions are grouped at one place in separate account and all these accounts are prepared in ledger. Classified data then summarized in the form of Trial Balance, Trading and Profit/Loss Account and Balance Sheet. Trial Balance is prepared to check the arithmetical accuracy of accounts. Trading and Profit/Loss Account is prepared to know the net profit or loss and balance is prepared to know the financial position of the business. summarized data is communicated to the interested parties like owner, employees, management, bankers etc. so that they may analyze them as per their requirement.