Family Economics and Consumer Education

Family Economics And Consumer Education 3 (2+1)

Lesson 08 : Account Keeping And Record Keeping

Basic criteria for selecting suitable method of Accounting

A family can follow different methods of maintaining records of its expenditure. .Each method has its advantages as well as disadvantages. A family can adapt any one of them. However some guideline have been suggested for selecting an appropriate method in its accounting system.

1. Simplicity:

Simplicity is an important character in a particular method of maintaining accounts and recording system of home .A simple record keeping does not involve much of time . It helps the family to make use of slack time for record keeping purpose in daily routine . A dairy for instance is used for all records are maintained.

2. Conveniences:

This characteristic is useful in recording at ease getting at and taking and care of a system. The record keeping is a family project in which children can also help in maintaining records with arithmetic involved in it. The record keeping should be very interesting and therefore convenient to handle. Hence convenience of handling is an important aspect in selecting system.

3. Adequacy:
The method of record keeping must not only be simple and convenient it should also be adequate to cover all aspects of record keeping. It should cover all categories of income and expenditure. Ledgers for instance are not appropriate. They are good for commercial purpose.

4. Flexibility:

The method of record keeping must be flexible. Card filing method or a diary method is good for keeping record of household expenditure in a flexible manner. A rigid method of record keeping is not desirable.

1. The record assets:

Eg: The land record, house records

2. The liability records like long term loans on house “farm” business etc purchase of valuable equipments on instruments repayment, procedures made etc
3. Insurance records: Life insurance assets insurance, crop insurance, against theft.
4. Tax records: House tax, income tax
5. Bank accounts and survey records: Pass book, cheque books and deposit certificates.
6. Other records: Pension records, investment records, expenditures records