An Accounting Overview
Accounting is frequently called
the “language of business” because of its ability to communicate financial
information about an organization. Various interested parties, such as
managers, potential investors, creditors, and the government, depend on a
company’s accounting system to help them make informed financial decisions. An
effective accounting system. Therefore, must include accurate collecting,
recording, classifying, summarizing, interpreting, reporting of information on
the financial status of an organization.
In order to achieve a
standardized system the accounting process follows accounting principles and
rules. Regardless of the type of business or the amount of money involved,
common procedures for handling and presenting financial information are used
incoming money (revenues) and outgoing money (expenditures) are carefully monitored,
and transactions are summarized in financial statements, which reflect the
major financial activities of an organization.
Two common financial statements
are the balance sheet and the income statement. The balance sheet shows the
financial position of a company at one point in time, while the income
statement shows the financial performance of a company over a period of time.
Financial statements allow interested parties to compare one organization to
another and/or to compare accounting period within one organization. For
example, an inevestor may compare the most recent income statements of two
corporations in order to find out which one would be a better investment.
People who specialize in the
field of accounting are known as accountants. In the United States, accountants
are usually classified as public, private, or governmental public accountants
work independently and provide accounting services such as auditing and tax
computation to companies and individuals. Public accountants may earn the title
of CPA (Certified Public Accountant) by fulfilling rigorous requirements.
Private accountants work solely for private for companies or corporations that
hire them to maintain financial records, and governmental agencies or bureaus.
Both private and governmental accountants are paid on a salary basis, whereas
public accountants receive fess for their services.
Through effective application
of commonly accepted accounting systems, private, public, and governmental
accountants provide accurate and timely financial information that is necessary
for organizational decision making.
This article was than from:
http://yayukdaryanti16.blogspot.com/2009/12/accounting-overview-english-version.html
opinion
Accounting is required in making the financial statements are used to determine the company's financial information, which requires financial information that lenders, tax departments, managers and employees of the investor. so it is very important in the activities of accounting firms
