Advantages And Disadvantages Of Receipt And Payment Account

Accounting , Business
Merits Or Advantages Of Receipt And Payment Account

The main advantages  of preparing receipt and payment account can be pointed out as follows:

1. Proper Recording Of Cash Transactions

Receipt and payment account records all the cash and check receipts and payments occurred during the period properly.

2. Provides Summary

It provides a summary of all cash receipts and cash payments incurred during a period at a glance. 
advantages disadvantages receipt and payment account
3. Verification Of Cash Book

It helps to verify the cash book of the business firm. So, it ensures the accuracy of company's cash book.

Demerits Or Disadvantages Of Receipt And Payment Account

Major drawbacks or disadvantages of receipt and payment account can be highlighted as folows:

1. No Disclosure Of Profitability

Receipt and payment account cannot disclose accurate profitability of the firm.

2. No Accrual Basis

It does not show cash receipts and payments on accrual basis. 

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3. No Non-cash Transactions

Receipt and payment account fails to show non-cash transactions of the firm.

4. No Surplus Or Deficiency

It records cash and check transactions of the firm but does not disclose the surplus or deficiency of the business during the period.
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Advantage And Disadvantages Of Secret Reserve

Accounting , Business
Benefits Or Advantages Of Secret Reserve

The main advantages of creating secret reserve can be pointed out as follows:

1. Covers Future Loss And Contingencies

Creation of secret reserve helps the organization to cover future contingencies, liabilities and unknown losses.

2. Provides Financial Stability

Secret reserve helps to maintain good financial health of business because it provides financial stability by covering unexpected losses and liabilities. 

3. Internal Financing

It may be used as the source of internal financing to retain assets and other properties.

4. Additional Working Capital

Secret reserve helps to improve operational efficiency of the firm by eliminating the inadequacy of working capital by providing additional funds.

5. Image And Goodwill

It helps to maintain image and goodwill of the business and wins the public confidence. 
advantages disadvantages secret reserve
6. Equalization Of Dividend

It helps to equalize the rate of dividend which gives positive message to the shareholders.

Drawbacks Or Disadvantages Of Secret Reserve

Some of the major disadvantages of secret reserve can be pointed out as follows:

1. False And Inaccuracy

It ignores accounting norms and standard by providing false and inaccurate financial data.

2. Misuse Of Fund

There is a high chance of fraud and misuse of secret reserve by the top level management.

3. Less Profit

Creation of secret reserve decreases the amount of actual profit of the firm. So, shareholders may be disappointed.

4. Borrowing Problem

Secret profit lowers the net profit of the firm. Due to poor profit condition, banks and other financial institutions hesitate to provide loan.

5. Decrease In Share Value

Share value decreases because of  secret reserve which is not good for the shareholders and business.
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Advantages Of Petty Cash Book

Accounting , Business
The main benefits or advantages of  petty cash book can be pointed out as follows:

1. Relief To Cashier

Petty cash book relieves the main cashier because it is prepared by the petty cashier. Main cashier can focus on other major financial transactions of the business.

2. Systematic Recording

It records all the minor expenses of the business properly and systematically and provides information quickly when needed.

3. Assists Controlling

It helps to control tiny expenses of the organization by making comparison between the petty expenses of two periods.
advantages petty cash book
4. Time And Labor Saving

Petty cash book saves the valuable time of main cashier because it is maintained by the petty cashier. Because of scientific recording, it is labor saving also.

5. Minimization Of Errors

Petty cash book helps to minimize errors and frauds because it is checked regularly and reported timely.

6. Preparation Of Main Cash Book

It facilitates preparation of main cash book quickly and easily by minimizing the number of small cash transactions.

7. Division Of Labor

Petty cash book promotes division of labor in the business organization
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Benefits Of Jogging

Education , Science
The main physical and mental benefits of jogging or running can be described as follows:

Physical Benefits Of Jogging/Running

1. Prevents Heart Disease

Regular jogging minimizes the risk of heart disease. It controls high blood pressure, bad cholesterol and blood sugar level. The heart becomes more strong and pump blood properly.

2. Prevents Diabetes

This aerobic exercise lowers the risk of diabetes. Regular jogging is very useful for diabetes patients to control their sugar level. 

3. Prevents Obesity

Jogging helps to lose weight by burning extra calories. It reduces the chance of obesity by controlling unnecessary body fat. So, proper weight can be maintained with the help of running.

4. Improves Sleep

Good sleep is very necessary for physical and mental fitness. Jogging helps us sleep better.

5. Strength Muscles

This physical exercise helps to develop and strengthen our body muscles and increases the fitness level.

6. Improves Respiratory System

Regular jogging or running enhances the capacity of lungs which helps to improve respiratory system.

7. Improves Longevity

Jogging makes both physically and mentally healthy. So, it helps to reduce mortality and improves longevity. 

8. Strengthens Bones And Joints

Jugging is a weight bearing aerobic exercise. So, it helps to strengthen bones and joints in our body.
advantages of jogging
Mental Benefits Of Jogging/Running

1. Reduces Stress

Jogging improves our mental health condition which helps to reduce stress, fear and anxiety.

2. Build Confidence

Our body and mind become strong because of regular running. So, it helps to build confidence by reducing negativity. 

3. Self-sufficient

Jugging encourages us to push our capabilities without any fear and stress. So, it helps us to become more self-sufficient.
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Advantages And Disadvantages Of Double Entry System

Accounting , Finance
Advantages/Merits/Benefits Of Double Entry System

Major advantages of double entry bookkeeping system can be highlighted as follows:

1. Systematic And Scientific Method

Double entry book-keeping is scientific and systematic system of recording the financial transactions of the business. It is guided by specific rules, principles and techniques.

2. Complete System Of Accounting

Double entry system records both aspects (debit and credit) of each transaction. So, it is a complete system of book keeping.

3. Suitable For Large Companies

It is suitable for large business companies with large volume of financial transactions and resources.

4. Ensure Arithmetical Accuracy

Trial balance is prepared under double entry system. Therefore, it ensures arithmetical accuracy of accounting records.

5. To Obtained Profit Or Loss

Profit or loss of a company can be obtained by preparing profit and loss account at the end of the accounting period.

6. To Know The Financial Position

Balance sheet is prepared at the end of the year. It helps to know the actual financial position of the business.

7. Helps Decision Making

Double entry system provides provides financial data, profit, loss and financial position of the business firm. So it helps the management to take appropriate decision for the betterment of business.

8. Comparison Of Results

Financial results of current year can be compared with the result of previous year which helps the management for future planning.
advantage disadvantage double entry system
Disadvantages/Limitations/Demerits Of Double Entry System

The main drawbacks or disadvantages of double entry book-keeping system can be pointed out as follows:

1. Complex System

Double entry book-keeping is complex system of recording the financial transaction of business. It requires complete accounting knowledge to maintain the books of accounts. It is not easy to understand this method of accounting.

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2. Time And Cost Consuming

It requires more time to record financial transactions in the books of accounts. It requires more money to install and maintain double entry book-keeping in the organization. So, it consumes more time, money and effort as compared to single entry system.

3. Unsuitable For Small Firms

Double entry system is nor suitable for small business organizations having less number of financial transactions and resources.
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Advantages And Disadvantages Of Internal Check

Accounting , Business
Advantages/Merits Of Internal Check System

Main advantages of internal check system can be studied as follows:

1. Division Of Work

Internal check ensures proper work distribution to the employees. Accounting and operational works are distributed according to the qualification, skills and experience of the employees.

2. Easy Location Of Errors

Internal check system helps to discover errors and frauds very quickly because errors of one staff is detected by another. So, errors and frauds can be prevented before the audit.

3. Greater Efficiency

Internal check helps to increase efficiency of the employees which leads to higher productivity.

4. Preparation Of Final Accounts

It makes possible to prepare final accounts of the company (trading account, profit and loss account and balance sheet) in short time which facilitates final audit.
advantages disadvantages of internal check
5. Helpful For Auditor

Auditor can conduct final audit in short time with less effort because there is no need to examine all the accounting records in details.

6. Suitable For Large Business

It is very suitable for large business firms with many staffs, large financial transactions and large resources.

Disadvantages/Demerits Of Internal Check System

Some notable drawbacks or disadvantages of internal check system can be highlighted as follows:

1. Not Suitable For Small Firms

Internal check requires more effort, more time and more staffs. So, it is unsuitable for small business organizations having less transactions and resources.

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2. Creates Confusion

Internal check may create confusion among the staffs which may lead to conflict.

3. Decrease In Work Quality

Auditor completely depends on internal check while conducting final audit. It may decrease the quality of his work.

Pros And Cons Of Internal Check In Short

Pros:
- It promotes division of work
- It makes easy to locate errors, frauds and loopholes
- It boosts employee efficiency which helps to improve productivity
- It is helpful for final audit

Cons:
- It consumes extra time and cost
- It is not useful for small organizations
- It may create misunderstanding, confusion and conflict among the staffs in the firm
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