Accounting and bookkeeping are very important parts of every business transaction. Bookkeeping is actually part of the operational procedure of accounting and hence, is an integral part of the procedure of accounting. It entails preparing resource documents for conducting various operations, financial transactions, and many other events of an organization. These records also show the financial condition and trends of an organization thus enable the managers to take preventive measures for better management and growth of the business. Click Here – visit website
Why need Introduction to Accounting and Bookkeeping
The purpose of accounting and bookkeeping is to record financial information in the book of accounts so that it can be accessed by other people involved in the daily operations of the business such as owners, investors, staffs, managers, tax authorities, banking officials, etc. The first step of bookkeeping involves creating ledgers that report the daily transactions of the business on a day-to-day basis. These ledgers are then processed by clerks who add the daily transactions of the business to the previous day’s entries and changes. These records are then stored in the books of accounts, where they are available to anyone who needs them for any purpose.
The next step in the accounting process is to create financial statements or reports that portray the information gathered from the accounting ledgers to managers, stakeholders, shareholders, lenders, tax authorities, and other interested parties. The purpose of preparing financial statements is to offer a standard format for accounting reports to be used for communication amongst these groups. For example, an accountant would prepare reports that would be presented to financial institutions for borrowing, investment, profits and losses, and distribution among other interested parties. In order to use accounting principles, an accountant would need to study different principles on which accounting operates.