What is the benefit of keeping accounts in business?
Answer and explanation
Correct answer: Keeping correct records of income and expenses
Keeping accounts creates an organised record of transactions such as sales, purchases, income, expenses, assets, and liabilities. These records help the owner calculate profit or loss, control cash, prepare budgets, and make informed decisions. Destroying bills or failing to track money removes evidence and weakens control. Therefore, option A states the main benefit.
Frequently asked questions
What is the correct answer to this question?
Keeping correct records of income and expenses
Why is this the correct answer?
Keeping accounts creates an organised record of transactions such as sales, purchases, income, expenses, assets, and liabilities. These records help the owner calculate profit or loss, control cash, prepare budgets, and make informed decisions. Destroying bills or failing to track money removes evidence and weakens control. Therefore, option A states the main benefit.
Which subject and chapter does this question cover?
This is a Class 11 Business Studies question. Chapter: Sources of Business Finance. Topic: Concept, nature and importance of business finance.
