Accounting!

1- Accounting is a systematic and complete record of financial transactions related to the company, included the synthesis of these transactions to the regulatory bodies and the actual tax collection, referring to the analysis and reporting.

2-Accounting is a systematic investigation, reporting and analysis of corporate financial transactions 

Accounting can be described as a means of communicating the financial soundness of a company or organization to stakeholder. This is way to assess the assets, liabilities and cash flows of all currents and future investor, or the future prospectus of the business. The Accounting department is responsible for recording and reporting the cash flows transactions of a company. This department has some key rules and responsibilities. including accounts receivable, accounts payable, payrolls, financial reporting, and maintaining financial control.

Function of Accounting:

Accounting includes business transactions, financial flows, the process of creating assets within the organizations, and preparation of financial record of the business financial situation at any point in time.

Accounting data:

Accounting data is information and data obtained from journals, accounting record and other departments supporting financial statement. e.g spreadsheet.These can be computer readable or paper readable.

Purpose of Accounting:

The purpose of accounting is to summarize and reporting financial information on performance, financial conditions, and cash flow. This information is used for money management, investment and borrowing decision.

Systems of Accounting:

(1) Cash system of accounting (2) Trade or commerce or actual system of accounting 

Cash system of accounting is an accounting method in which receipts are recorded, when they are received and expenses are recorded during the period in which it was actually paid. Cash accounting in which two types of accounting. Others are actual accounting whose revenue and expenses are recognized when they occurs. SMEs tend to use cash accounting, as it is very easy and easy. Its seems to give a clear image of how much money the company is really close. Company, however, need to comply with generally accepted accounting principle of actual accounting. Actual accounting is the basis current accounting treatment. It is also know as the trademark system of accounting. 

Branches of Accounting: 

There are three main branches in accounting which consist financial accounting, cost accounting and management accounting, accounting is based on systematic way to recorded business transactions on accounting principle. This is the original form of billing process. 

Principle of Accounting: 

Accounting principle are rules and regulated that company must obey when financial data is presented. The general scope of accounting principles is based on generally accepted accounting principles in united state of america. 

Concept of Accounting: 

Accounting policies used used to create accounts and financial statements. There are Four basic concepts in accounting. 

Accrual Concept: Revenue or expenses when received or paid in cash are not recognized when the occurs. 

Consistency Concept: The method should be used unless there is valid reason to do if a billing method is selected or not. 

Continuity Concept: Accounts are preparing business in good condition in the foreseeable future profit organizations.

Prudence Concept: This method should be used when income or profit are included in the balance sheet.

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Trial Balance!

In all the debit and credit statements of the double entry account, the discrepancy indicates an the error.

The trial balance is a brochure that sets the credit for all the books credit and loans set. Companies usually prepare trial balance periodically at the end of the each reporting period. The general purpose of the trial balance to ensure that the entries to the accounting system of the company are the mathematically correct.

By creating an enterprises the trial balance, You can detect the mathematical errors that occurs in a dual input accounting system. If the total amount of the borrower money is equal to the total credit, the balance of the trial balance is deemed to be the outstanding and should be no mathematical error in the accounting record. However, this does not means that there is no error in the company's accounting system. For Example, a transaction that is no properly classified or a transaction that is missing from the system may be an accounting material error that can not be tracked by the balance.

Evaluation of the trial balance and roles in accounting process:

The balance of the trial balance is an internal report at the end of the accounting period and the final balances is recorded in the each account. The report is mainly used to ensure that the of all the debit equal the sum of all the credit. In short, There are no impossible entries in the accounting system, so accurate the financial statement. Judges typically ask for the end-of- the year the trial balance when initiating audit to moves the account balance in to the audit report. They can request an electronic version that can be easily copied in to the software.

Although the balance of trial balance can also be used to prepare financial statement, the dominant use of the computer accounting system will automatically create a report to be used for this purpose.

Essentially, there is no need to use the trial balance report in the accounting activities.

When the initial balance of the trial balance is pressed down, it is called unbalance trail balance equilibrium. Next, if the accounting team corrects the errors and the adjust them to displayed the financial statement according to accounting standard ( such as GAAP and IFRS), this report is called a fixed balance trial balance. Appropriate trial balance report are usually printed on the year- end book and stored. Finally, after the period is called the trial balance after the closure.

The balance of the trial balance is the strictly a report accumulated from the account book. However, as a result of the review of the report, this can be done, but the balance sheet accounting contains a configuration process the convert the unadjusted trial balance is in an adjusted trial balance equilibrium state.

Trial balance equilibrium format >

The first trial balance report has the following column:

1. Account number
2. account name
3. Final flow balance (if applicable)
4. Balance of credit period ( if applicable)

Each line contains only one the final account balance. All the account with final balance are listed in the trial balance. Normally the accounting software automatically includes all known account with the zero balance.

In a modified version of the trail balance, you can combine debit and credit in single column and add column to display the corresponding entries and correct balance.

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Ledger!

A ledger is a major book or computer file for recording and preparing economic transactions accounted by accounts items, There are debit and credit in individual column, start of balance indicates the end of the money balance of the each account.

The general ledger is a permanent summary of all accounts included in the supports views and list the individual transactions in daily order. Each transaction moves from one magazine to one or more accounts. The company financial statement are generated summarizing the book's total.

General ledger is a collection of company's accounts of accounting record. The general ledger provides a comprehensive list of the financial transactions in the business life cycle. The general ledger contains account information necessary for financial reporting and includes accounts of assets, liabilities, exclusive interest, income and expenses.

The use of general ledger is the part of t he system the account uses to prepare the company financial statement. The transaction is posted to the general ledger account and the accountant creates a report showing the test balance, all the accounts of each account and multiply account. The balance of the test is adjusted by adding additional entries and the balance of the test is used to generate the financial statement.

The business organization card is the model of the system number of the ledger that contains all the department account used in the business. Each general account is assigned to the number that is available in all the department. Number are also assigned to individual accounts within each department.

Most small business enter-or-four -digit number for each account, depending on the of the transactions. At the end of the accounting cycle, the amount amount of individual account in each department is added and used for preparing the financial statement.

In the account book:

• Sales ledger, receivable notes. This book is made up of financial transactions performed by the customers of the company.
• Book saves money for corporation acquisition.
• General ledger representing accounts of five main types of assets, liabilities, revenue, expenses and the capital.
• A scattered ledger once called a shared ledger is a copy of the copied, distributed, and synchronized digital geographic data distributed across multiples sites, countries and institution.
• For each digital recorded in the ledger, the equivalent credit must be made so that the debit is equal to the total credit.

The general accounts are the accounts or recorded used to start and store balance and the revenue transaction. Example of general ledger accounts includes the assets accounts such as cash, accounts receivable, inventory , investment, land and equipment. Example of general account liabilities includes accounts payable, accrued expenses and and the customer deposit. Example of general ledger income statement including sales, service fee, salary cost, lease expenses, advertising expenses, interest expenses, and the loss of sales assets.Some accounts in the general ledger summarize record called accounts checks. Detail supporting each control account are outside the general ledger called a large back book. An account is an example of the general ledger management account and there is a registration of a subsidiary that includes credit activities of the each customer. Inventory,equipment and accounts of the general account are controlled to be paid and subsidiaries in the book contain supplementary document for each.

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Journal!

Journal is a record holding accounting transaction in a sequential order and its means how it is displayed.Ledger is a record that provides the accounting transactions. A accounting is a unit that record and summarizes accounting transactions.

Journal accounting is record of accounting journal transactions.The daily input can consist of the several investigation, each of which is debit or credit. The sum of the debit must equal to the total credit and the entry pf the account is considered "imbalanced".

Journal entries are the method used to the enter accounting transaction in the company's accounting record. Accounting record are combined in the journal ledger. Here, you enter daily entries in various subordinate accounts and do so in the journal ledger. This information is used to compile the financial statement at the end of the reporting period.

There is no upper limit on the number of the rack items included, but at least two coil entries are required for the journal entries. An entry in a paired journal is known as a single log entry, but entries that contains many items in a row are called composite log entries. The company can use many journal entries in a single posting period. Therefore it is desirable to use more log entries as a small number of compiled journal entries to ex[plain why the entries is the created. This is the useful, in particular, when examining  the daily entries at the later date when the auditor is checked.

When you create an accounting transaction, at least two accounts are always assigned, one account entry is created in the one account. and one credit entry is created for another account.

The debit and total credit of all transactions must always be equal, accounting transactions are always considered " balanced". If the transaction is not outstanding, you can not write financial statement. Thus the use of debit and credit in a two - digit transactions record format is the most essential of all the accounting controls.

In small accounting environment, the accountant can record log entries, In large enterprises, a large general accountant may control how to the record journal entries and record the daily entries.

Journal entries format >

At a minimum, the journal entries must contain the following:

• Accounts where debit and credit are recorded.
• Subscription date.
• The fiscal period in which the entry are recorded.
• The name of the person logging the entries.
• All administrative authorities.
• A unique number that the identifies the log entry.
• If the subscription is a single subscription, subscription return entry.
• It may be necessary to include the extensive documentation in the journal entries to prove the reason recorded. Please give at least a brief description of the log entry

Special type of accounting journal entries:

The conversion log entries is changed manually during the next accounting period or the accounting software is automatically changed in the next period.

Report journal entries are repeated for successive period up to the end date.This can be done manually or it can be configured to run automatically on the accounting system. 

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Credit.Cr!

Credit is a contractual agreement that the borrower has a foundation and agree to pay back to the lender with the interest at any time at a later date. Credit refers to accounting that reduces assets or increase debt and equity in the company's balance sheet. In addition, in the income statement, net income decrease, while credit increase net income.

The abbreviation of credit: The abbreviation is used for credit is "Dr".
Types of credit >>>

There are several kinds of the credit. If a bank provides a car loan, mortgages, loan signature, credit facilities to the customer, these are all credit forms. Essentially, the will credit the borrowers that the amount of the borrower will have to pay it later. For Example, when someone at a local shopping mall receive purchase of a VISA card, the payment is considered a kind of credit because it is necessary to purchase the items and pay it later.

However, these loan are not the only types of credit. If a supplier provides products or services to individual but does not pay the later, this a kind of credit. For example, if a restaurant received a truck from the the seller, but the seller does not demand payment until the one month later, the seller will provides credit form to the restaurant.

In accounting, credit is a subscription that includes the amount received. Custom credit are displayed on the left side of the debit card on the right. For Example, if a person search his expenses with an expenses report, he refer to deposit such as credit, and has deposited money on to amount as the debt.

In accounting,the credit balance is the final amount on the right side of the G/L account.

The credit amount is the normal and is expected in the general account and the following branch accounts.

Accountability account:These include accounts payable, trade notes, salary payment, interest expenses, accrued income taxes, customer deposit, deferred taxes, etc. For Example,  the credit balance of the payment account indicates the value of the supplier. ( Therefore, it show that the debt account balance is paid more than debt amount, bad account, etc). Since the liability account is permanent account, the balance will not be settled at the end of the year.

Equivalent account:Four example of stocks accounts are general account, monetary redemption principle, residual income and smith capital. These are the permanent accounts and the balance ends at the end of the fiscal year.

Accounts and revenue account: Example are income, income, interest income, equivalent acquisition and collection. Because of the provisional account, transferred to retained earning or owner's capital account is done at the end of the each accounting year.

Contribution account:Two example include reserve and cumulative amortization of suspicious accounts. The credit outstanding of these account recognize the aggregate and net of the account receivable and real estate, equipment and significant assets. As these are permanent accounts, the balance is not closed at the end of the posting period.

Cash payment account:This includes purchase, income, income on discount, employees expenditure, etc. The credit balance of these accounts allow a company to report both net assets and net worth. The balances of these interim accounts are transferred to the capital accounts of the owner's or owner at the end of the fiscal year. 

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Debit Dr!

A debit is an accounting item that result in an increase in assets or decrease in corporate the liabilities. In basic accounting, debit is the credit balance that act in the opposite direction. For Example, if a company has to pay debts at the time of the equipment purchase, fixed assets and creditors are charged to the liabilities account according to the nature of the loan.
Debit is a function that found all double entry accounting system. For common log entry, all rates are placed as headlines, and all creditors are called debit lines. When using a T card, the debit rates is on the left side of the chart and the credit is correct. Debit and credit are used in the balance of the test, adjust the balance of the tests and make sure that all the entries are balanced. The total dollar amount of all debit must equal to the total dollar amount of all debit.
For accounts items, the debit balance is the financial amount on the left side of the G/L account.
Abbreviation of Debit balance:The abbreviation used for debit balance is "Dr".The debit balance is normal and is expected in the following accounts.
Assets account |Cash, accounts receivable, inventory, prepaid expenses, assets such as the building, land, furniture, equipment, etc. For example cash balance are the positive amount. ( Therefore, the cash deposit balance indicates the negative amount that could be a written check with an amount greater than the currently available amount).
Expense accounts and loss accounts |Problem of accounts and accounts losses such as cost of sales, salary cost, lease expenses, interest cost, loss of equipment sales, lost court proceeding. ( The debit balance of these accounts is the transferred to the owner's remaining revenue or the owner capital at the end of the each fiscal year).
Contra- revenue account |Cash accounts ( including the sales reviews, returns etc). (Debit balance in these accounts include of the report of the total sales and sales are transferred to capital account at the end of the each accounting period).
Contra- Liability account |Possible account such as the discount on effects toolbox. ( This debit balance stipulates the presentation of the same fair values as the crying value or the crying amount of the security and an the indication of the cost).
Contra- equity account |Equity accounts such as the owner's drawing and treasury shares.( The balance of the debiting account of the redemption account is not the principle of the owner's accounts, but the balance at the end of the each year decrease).
The term debit balance has several definition.These are as follow:
Accounting: The debit balance is the balance of account with balance of account balanced positive. Account that generally have account balance includes assets, expenses, and losses. Foe Example, of these accounts are fixed assets ( salaries, expenses and losses) on assets disposition (loss).
Bank account: Debit balance is the negative cash balance of current checking of banks. Such an account is called an overdraft and therefore can not be balanced in a negative way- refuses to borrow a debit balance refusing to borrow the check presented in the account. Alternatively, the current account balance is set to zero with an overdraft agreement.
Debt: The debit balance is an excellent principle of loan from a lender by a borrower.
Investment: Debit balance is the amount of cash lent to the investor margin account from the broker to buy the security and the amount the investor needs to pay before entering the purchase transactions.

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Branches of Accounting!

Different accounting firms seems to examine different types of accounting information required by different kinds of peoples. There are three major accounting department : Financial accounting, cost accounting, accounting such as owners, shareholder, management teams, suppliers, creditor, tax authorities and various state agencies.

Financial Accounting >

Financial accounting is based on a systematic way to withdraw ant business transactions based on principle accounting. This a first accounting process. The primary functions of financial accounting is to calculated the profit and loss of the business over a period of time and accurately grasps the company financial condition on a specific date. Test balance, income statement and company balance are based on financial accounting applications. This is used by lender, bank, financial institutions to evaluate the company's financial situations. In additional, tax authorities can not calculates taxes on these registers.

Cost Accounting >

The cost evaluates the transaction with the value of the products or the service being offered. Calculate the cost that takes in to the accounts all factors contributing to productions ( both manufacturing and administrative factors). The purpose of cost is to help management determined prices and management products costs. This is also means waste, dumping, and defects in manufacturing and marketing process.

Management Accounting >

The accounting department provides management information to better manage the business. This makes it possible to make important decision and to control various activities of the company. Management can effective decision using a variety of information management system such as budget, expected cash flow statement, analysis of variance analysis, cost effectiveness analysis reports, etc Quantity, OTC calculates etc.

In additional to the above three accounting department, there are many branch operations, which will be extremely useful for various purposes as the shown below: 

Auditing: Auditing is a part of accounting when a certified public accountant know as auditor examines the company accountant and proves its accuracy and consistency. Internal audit are also carried out if the company regular audit account and management assistance employees have stored specific reports for the audit purposes. 

Tax Accounting:Tax accounting contract includes tax element. Preparation and presentations of the various tax returns, management of legal influence, and so on. The accountant will reduce the tax payment and help the financial accounts collect the financial statement of the tax returns of the various jurisdiction. Tax accounting includes the impact of taxation on the various aspect of the business, legal tax credit and consultation on the verification of the impact of the taxable taxation. 

Fund Accounting:Fund accounting communicates with the registration of fund from unprofitable entities isolated fund accounts are maintained for separate acts such as social assistance plan of different nature and ensure proper use of fund. 

Government Accounting: Government accounting is performed through the use of remuneration aggregation of the central government and state government financial statement. Respects the accurate and effective use of various budget allocation and the safety of public funds. 

Forensic Accounting: Forensic accounting also known as the statutory accounting, help to calculate or resolve misunderstanding of damage. A survey is conducted and calculation are made to correct damage. 

Trustee Accounting: Trustee accounting is the accounting and evaluation of the business and the property of the third party under the control of the another person.

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