what is Bookkeeping?
The recording of a company’s financial activity requires the recording, on a routine basis. Companies should monitor all details in their accounts through appropriate bookkeeping and determine main activities, spending and funding.
Bookkeepers are people who control all business financial records. Companies will not know their actual financial status without bookkeepers, as well as the transactions taking place within the company.
Why bookkeeping is necessary?
Much when you need a database for writing a paper, bookkeeping is an essential source summarized in the financial accounts or some other report you see. It becomes the starting point for accounting with bookkeeping tracks and documents all financial transactions. No bookkeeping= No accounting.
For corporations, small or large, bookkeeping, therefore, becomes important.
The value of accounting is as follows:
- Checking the profits, transfers helps to keep track. All other transfers made by a company are registered, sold, and bought.
- It helps to routinely summarize sales, expenditures, and other documents.
- It offers information to generate accounting records that provide us with detailed information on the company’s earnings or the valuation of the company at various points in time.
what is Accounting?
The term accounting goes far beyond bookkeeping. The whole subject area can be defined as accounting, while accounting is just a component of the framework that incorporates accounting elements of its operations. Accounting may include essential issues such as bookkeeping systems development, system management, and operational controls and data processing.
Accounting gives you evidence that the organization wants to evaluate better. It not only covers this but also analyses financial statements and results and then reports from this detail to the right persons. These quarterly reports offer information on the results and general progress for company owners, customers, investors, and others.
keypoints for accounting
- Regardless of the scale of a company, accounting is a required mechanism for decision making, cost control, and evaluation of economic success.
- The accounting officer should meet basic accounting needs, but the Certified Public Accountant (CPA) can be used for broader or more complex accounting activities.
- Two important forms of company accounting are management accounting and cost accounting. Management accounting helps management departments make financial choices, while cost accounting helps business owners determine how much the commodity can cost.
- For the preparation of financial accounts, the skilled accountants are adopting a sequence of principles known as the Generally Accepted Accounting Principle (GAAP).
