Accounting – What is the accounting?

accounting

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.

Chart of Accounts

A list showing the total number of accounts used by an organization is known as the chart of accounts. Different businesses have different types of accounts and the different number of accounts.

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:

Financial: It posts all business transactions of the company and prepares the balance sheet/income statement at the end of a financial period

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

Also includes Advanced Financial Accounting and Management Accounting

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.

 

You may also like to read:

Economics – What is economics?

Summary
What is accounting?
Article Name
What is accounting?
Description
What is the accounting? Accounting is the methodical and overall recording of financial transactions related to a business, and it also implies...
Author
Publisher Name
AC
Publisher Logo
Sidebar