Accounting or accountancy is basically the measurement, interpretation, and reporting of financial and non-financial data about organizations including corporations and businesses. Accounting involves applying principles of accounting to data that are used to control and evaluate the performance of a company, business, or organization. It also involves the systematic retrieval of information, both internally and externally, that will meet the requirements of management in the preparation of financial statements. The concepts and practices of accounting have changed over time with changes in the way businesses are conducted, the focus of investment, and the availability of financial resources. In order for an accounting system to serve its purpose it must be reliable and well understood by people involved in the different stages of the organization.
Every transaction that makes up the financial process is recorded in documents known as accounts. The accountants who prepare these accounts keep very detailed records of the activities leading to their creation. The purpose of all accountancy records is to provide a clear picture of the activities of the organization, to support the evaluation of the organizational and operating performance, and to facilitate the decision making process.
There are three major parts to an accounting record-all financial information associated with the operations of the business; valuations of financial positions, transfers of assets and liabilities, and receipts and payments. The first part, valuations, is primarily concerned with the buying and selling of goods and services, the second part, primarily with transfers of existing assets, and thirdly, with payments and receipts. These three parts of accounting are interrelated and influence each other when there are significant changes in the financial position of the organization.
Accounting records are prepared by accountants, who perform their duties on a daily basis in offices and in their homes. The scope of the work of an accountant is much wider than just preparing accounting reports. They are required to analyze the data obtained, interpret them properly, report their findings, and provide recommendations on various aspects of accounting transactions and trends. All of these activities are conducted in order to arrive at financial statements or reports that will provide accurate and reliable information to the management and owners of the company.
Managers can greatly improve their knowledge and proficiency in financial accounting and managerial accounting through online training. An accountant with online training can present the different accounting subjects in a clearer manner, making it easier for managers to understand and learn. The topics covered in the course should cover the major topics such as business development and planning, cash flow analysis, financial reporting, control of financial resources, preventive management of errors in accounting, and the analysis of the market. Online trainings make accounting more interesting, relevant, and understandable. They provide a good foundation in accounting knowledge that managers can use to make better managerial decisions. In addition, they can improve managerial accounting competency.
A good accountant always checks for the accuracy of financial statements and data. He also criticizes the accounting reports if necessary. Checks should be done on the accuracy of income statements, balance sheet reports, income statement reports, and the balance sheet. An auditor who is highly qualified analyzes the financial statements. He makes sure that all the data presented in the reports are correct and reliable.
The managerial accountant enforces compliance with laws and regulations regarding financial accounting and managerial accounting. He ensures compliance with rules and regulations regarding auditing, review, authorization, supervision, and follow-up of the accountants. Auditors prevent and report accounting irregularities and mistakes. They help companies improve their financial performance. This will, in turn, improve the overall profit and market share of the company.
The basics of accounting refer to the methodologies, principles, concepts, systems, methods, principles, and practices used to determine the financial transactions. The accounting period is the time period in which the transactions occur. Financial accounting usually relates to the last day of the reporting period for the financial statements. A company’s book of accounts comprises the financial transactions in its books. Management accounting compares the book of accounts with the model of accounting.
