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 … Read More