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The Importance of the Record Keeping and the Accounting Process

Record keeping and the accounting process is one of the most ancient processes in the world. Civilizations from the ancient to the mediaeval have been keeping their records as well as maintaining the balance sheets right down the ages. The only thing that has changed over the years is the method that the people have adopted for record keeping and the accounting process. In the present day age when the technology has advanced to such a level when almost all the spheres of life have been touched by it the record keeping and the accounting process has also not been left behind. Now there are various accounting softwares as well as systems that help the accountants as well as the record keepers in maintaining their books as well as updating their financial reports.  

If defined in general, the accounting process is the art of communicating the financial information to the people concerned. The information is generally in terms of the financial form statements that indicate the resources as well as the assets of the company or the business entity in the monetary terms. It can also be said that the record keeping and the accounting process is the mathematical science that is utilized in determining the causes behind the success as well as the failure of the business. As defined by the AICPA-“ The art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions, and events which are in part, at least, of financial character, and interpreting the results thereof.” As stated earlier the accountancy is an art that is thousands of years old and has been practiced by almost all the prominent civilizations.

The term record keeping means the art of keeping the records of an organization right from the time that they are created to the time that they are disposed of. The entire process might include the classifying, storing, as well as securing and the eventual destruction of the records. The record keeping could be of the tangible object or the digital information. Record keeping is actually concerned with the evidence of the organization’s activities. Recordkeeping and the accounting process are very much an essential part of any organization.