Record Keeping

Published by: BhumiRaj Timalsina

Published Date: 19 Jan 2022

Record Keeping in Accountancy of Grade-9, Reference Notes

Introduction

The process of collecting, recording, preserving, utilizing and disposing of the official document in a systematic manner is called record keeping. Records are the history of the organization. A successful operation of an office and organization mostly depends on its records. Record keeping is the sources of information which are helpful for the smooth and efficient operation of daily activities of the organization. These are the basis for planning and decision-making and useful for controlling the activities of the organization effectively. Records provide evidence of the activities done and help in maintaining a warm relationship with all concerned parties. Record keeping is the basis for evaluating, comparing and reporting the activities of the organization. The records should be preserved until a period for which these are useful and then should be disposed of.

Meaning and Definition

Is a part of accounting and is concerned with record keeping or maintenance of books of accounts. It is often routine and clerical. Book-keeping is an act of keeping permanent records of the financial transactions of a business in a systematic and orderly manner. The financial transactions of the business are identified, recorded and classified in different books. In modern entities, records of financial transactions are maintained under a double entry system. The double entry system has been recognized as a systematic and complete system for recording financial transactions. Double entry system recognizes that every financial transactions has two aspects. It then records two aspects of a transaction simultaneously in two separate accounts with equal amounts. It provides the aspects of a transaction with their names of debit and credit. Thereafter, with the help of ledger accounts, profit and loss account and the balance sheet are prepared to ascertain the profit and loss and the financial position of the business. Thus, the double-entry system is the most systematic and complete system of book-keeping. Therefore double entry system is the technique or method of book-keeping which recognizes the fact that every financial transaction has two aspects and records two aspects of each transaction simultaneously in two separate account giving their names 'debit' and 'credit' respectively.

Records are the collective forms of written documents. These include bills, vouchers, letters, circulars, files, books of accounts, financial statements, reports, contracts agreement and order written documents. The systematic and scientific process of collecting, classifying, recording, retaining, preserving, using and disposing of the written documents is called record keeping. Record keeping is done for future reference.

"Record keeping is concerned with the creation, distribution, maintenance, retention, preservation, retrieval and disposal of written materials." - S.P Arora

" Record refers to informational document utilized by an organization to carry out its various functions." -Z.K Quibble

Objectives and Importance of Record Keeping

  1. For collecting documents from different sources and classify them on the basis of their importance.
  2. For disposing of off the records when these become useless.
  3. For keeping a record of files, books of accounts, computer, disks, and microfilms and preserve them for the future reference in a systematic manner.
  4. For providing the evidence of the activities done and to settle the disputes and misunderstanding.
  5. For fulfilling the legal formalities by retaining important records for planning, decision making, controlling, evaluating and reporting.
  6. For providing reliable information easily and immediately at the time of necessity.
  7. For providing the basis for operating clerical and administrative activities efficiently.
  8. For providing true and reliable information and data for planning, controlling, evaluating and reporting.
  9. For guiding the concerned authority to present her responsibility efficiently.
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