So what is this thing called "Accounting" anyway? It's simply a series of methods and processes used to track and report the financial flow in a business.
When businesses offer goods and services in return for money, clerks and accountants post journal and ledger entries to track how and when this money comes in. They do more than just track sales. Accountants also track money that goes out of the company to pay for expenses, taxes, and other things. Any change to an asset such as depreciation will also be recorded. The accountants are often the people who make up the financial statements, which are like the scorecard for the company's growth. In most firms, accountants follow the Generally Accepted Accounting Principles in ensuring standardized and truthful financial information.
(To Learn More About GAAP, Click HERE))
Accountants and the clerks that help them, serve a very vital role in ensuring that the company's assets are properly accounted for.
Stop back next entry when I discuss some of the basic verbiage and terminology used in Accounting.
To return to initial post in my Accounting Review Guide, click HERE.
Accounting, GAAP, Methods and Processes, Assets