Accounting

Accounting is the process of recording financial transactions pertaining to a business. The accounting process includes summarizing, analysing, and reporting these transactions to oversight agencies, regulators, and tax collection entities. The financial statements used in accounting are a concise summary of financial transactions over an accounting period, summarizing a company’s operations, financial position, and cash flows.

In the case of small businesses and organizations, these functions are handled by an accountant or bookkeeper or at most a certified accountant. But in the case of larger organizations these all are managed by CPA and Chartered Accountants (CA) along with their teams.

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Features of Accounting
 

• It is expected that the accounting principles should be feasible, predictable, and applicable. This should be easy to apply in the accounting system and should be easy enough to be implemented by everyone.


• Accounting has a unique feature of recording every financial transaction. It provides a provision of recording the transaction in a detailed manner which can be used by the companies. The recording is systematic and can be done anyone who is adept in accounting basics and laws.


• Accounting provides a feature of classifying all of the financial transactions into a different category. These categories are grouped according to their similarities in one place. For example, all of the payments received, and the receipts will reflect in the cash book or memo book.


• These entries are useful to determine and locate the nature of the transaction and to analyze its effect on the overall balance sheet.


• A principal has relevance when it has figures and facts. Accounting principles full of figures and supporting facts, which makes it very relevant. It is ensured that personal whims and biases are not included in the case of accounting, which makes it bias-free.


• Summaries also provide exams on the overall financial health of the organization without taking a lot of time.


• All of these entries can be validated and confirmed to test the validity of the statement.


• The interpretation can be analyzed and found out whether the financial health of the organization is in a good position or a bad