Types of accounting and its steps
What is accounting?
In today’s world, accounting is one of the fields that has attracted many fans, because an accountant is needed in every place and every job. It is not possible for you to go to places like companies and even boutiques and the accountant is not working there. In this article, we will review this field, then we will introduce you to its types.
Accounting definition
This phrase means how a business such as companies and institutions record and store their financial information and bills. This profession shows shareholders and managers whether they will succeed in their desired project or not. Do they profit or not?
On the other hand, accounting examines the amount of liquidity of the account, the value of the company’s assets and liabilities. This field can be likened to a big machine that has an input and an output, and you provide your raw financial information to this machine, then you get the information you need from it.
Who is the accountant?
An accountant is a person who handles financial operations and related matters and is considered an essential pillar in the accounting cycle. An accountant, like any other person, must have the characteristics that are discussed below.
One of the big and important conditions in turning to this job is to be interested in mathematics; Because all financial activities deal with mathematics.
A successful accountant must have complete mastery of writing principles and the ability to sit in a chair for long periods of time and do calculations.
Accounting is one of the jobs that engages your mind a lot; So that the accountants of the companies should be involved during the holidays.
Also, an expert accountant must be logical and orderly and carry out his work with perseverance and high concentration; On the other hand, he must be honest and have high self-confidence.
Accounting procedures
At first, this cycle should be defined; In general, when you register the money from your financial activities in the accountant’s office, you have started this cycle and the accountant is also responsible for recording this information.
The four important steps in this job are as follows:
Checking invoices, bank statements and analyzing this information
According to the two-way accounting rules, the accountant must transfer the transaction information to the general ledger.
Record all checking financial statements and their balances and prepare a trial balance.
After preparing the trial balance, prepare adjusting entries in the form of financial accounts.
This science has many branches that we introduce each branch of this science to you in this article.
Financial Accounting
The main purpose of this branch is to prepare financial statements and adjust these statements. As you know, tax is one of the things that exist in all countries of the world. Tax profit must be carefully checked and this is achieved by keeping accounts and preparing financial statements, which show the profit earned in the company. Banks and creditors are the main users of financial statements and this science.
Governmental Accounting
The government must accurately record and control its financial expenses and predict its future income and expenses, then give these budgets and bills to the parliament; Therefore, this branch has been created to control the expenditure and income of the government and predict the future expenses. The accountant must act carefully in this branch; Because if he misreports the expenses and has trouble predicting the future expenses, he will suffer a disruption in the government’s financial affairs.
Management Accounting
In this branch, the accountant should report the final price of the products available in the market, he should also see how much of these products were prepared and measure the selling price of services. The management accountant must check the production capacity of the products and then report this information in full.
tax accounting
In this branch, the accountant must identify the income of companies, institutions, and every place and job that includes tax, then calculate the amount of tax that is brought to each of the centers. To determine the amount of tax, the accountant must follow the tax laws; Because tax laws have become an important issue in all countries of the world and it is a detailed work.
Industrial Accounting
This branch was created after the industrial revolution in Europe in order to obtain the final price of the manufactured products, so the most important goal of this branch is to obtain the final cost of the products; Therefore, this branch has become one of the most used branches. This branch is very important in developing countries; Because these countries need to evaluate industrial units on a high scale. On the other hand, this branch is also called the cost price.
Store accounting
As the name of this branch suggests, this branch deals with checking goods, controlling financial statements, receiving checks and paying them in the store. In this branch, the accountant must do things quickly and with high accuracy.
