The comprehensive preparation of records for all financial transactions in a systematic way in a business is known as accounting. It can also be described as making summaries of the financial transaction reports, analysing them and making reports on all these transaction to agencies that oversees activities such as auditing in a business as well as the entities required to collect tax. Each business is required to have an accounting segment which varies depending on the size of the organization where accounts can be handled by accountants and bookkeepers for the small entities and a finance department with a number of employees for large companies. It is through the reports provided from the accounting sections that enables businesses to make informed decision. Bookkeeping and tax preparation are some of the roles carried out by those individuals who engage in accounting in a business.
Financial transactions such as sales, purchases, receipts or payments that have been made to an individual or another organization that take place in a business need to be recorded by the bookkeepers at all times. There are various record books where a bookkeeper is required to record both the cash and credit transactions which includes the supplier’s ledger, daybook, customer’s ledger and the general ledger. With proper bookkeeper’s record, an accountant is able to come up with reports on the financial situation of the business. Single-entry and double-entry bookkeeping system are the two common entry systems in bookkeeping. It is only the expense and income accounts can be recorded in the journal for expenses and revenue single-entry bookkeeping method. Double-entry bookkeeping method two entries for accounting are required to make records for the transactions and can occur in the liability, asset, expense, equity or the revenue accounts.
Another duty in accounting is tax preparation where appropriate tax returns can be filed for the business to the responsible body every year. Other people who can do the tax preparation includes tax preparer, certified public accountants, attorneys or even enrolled agents at a fee. It is important for every business to file their tax returns every year and the tax prepatation includes activities such as calculation of the total tax amount and filing the tax.
Accounting persons need to possess certain qualities that indicate they are suitable to carry out their duties well. The individuals need to be professional and ethical in everything they do so that they are able to keep financial matters away from unauthorized persons. They should also have proper communication skills both written and verbal to ensure that they are clear and understand everything in the field. They also need to have proper customer relations more so those that interact with customers every now and then in the business such as when serving them and addressing issues.