LIst three reasons why it important to keep daily records of all business transactions. Q9

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Expert Solution

It is important to keep daily records of all business transactions transaction records helps in monitoring the progress of our business. Some of the other important reasons are mentioned below:

- Helps in future financial Planning – Maintaining good business transaction records help in financial planning like paying the employees or the creditors.

- Financial Statement preparation – Keeping daily records of all business transaction can help us to prepare the financial statements quickly and with accuracy during year-end. These financial statements help in dealing with bank loans or creditors and hence, helps in managing the business. These can also be helpful to identify the strength and weaknesses of our Business.

- To identify the income sources - We need to know the sources of our income to identify business and non-business activities and also to separate taxable from non-taxable income. Having a good business transaction record will also be helpful while preparing the tax return.

jeff jeffy answered 6 months ago

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