What is the accounting? Accounting is the methodical and overall recording of financial transactions related to a business, and it also implies the procedure of summarizing, analyzing and reporting these transactions to supervise agencies and tax collection entities. It is often synonymous with bookkeeping, meaning the proper recording of all business transactions in a company. In the business organization, this is the department of a company in which the bookkeeping takes place. This department is responsible for the administration of all business transactions of a company
Tasks of Bookkeeping
In bookkeeping, all business transactions must be recorded numerically, consistently, chronologically and objectively. For each document, a booking is made. Conversely, however, the principle “no booking without receipt” also applies. Invoices, receipts, receipts etc. are therefore very important due to their document function.
Principles of Accounting (GAAP)
Principles for the proper management and retention of books, records, and documents in electronic form and for data protection.
Sub-areas of accounting
Particularly in larger companies, bookkeeping is carried out in various departments that specialize in specific areas. Therefore, it is divided into the following main categories:
Accounts receivable: In accounts receivable, receivables, that is (financial) claims, are administered to customers
Accounts Payable: In Accounts Payable, liabilities, i.e. (financial) obligations to suppliers, are managed
Payroll: Payroll accounting deals with the payroll of a company
Differentiation between accounting and bookkeeping
Accounting and bookkeeping are often used interchangeably in business administration and describe the duty of a company to record its business transactions. In the corporate hierarchy, on the other hand, the term accounting refers to the department in which the bookkeeping is carried out.
A distinction between the two terms is therefore difficult and must be done from the context.
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