Accounting is keeping record of all your financial transactions \u2013 purchases and sales, expenses and investments made for the business. Accounting is the process of rules used to reach results for your business \u2013 your assets, liabilities and profit or loss for the period.\u00a0<\/p>\n
Accounting may also seem like it\u2019s a big mumbo-jumbo and needed for just some officials or regulatory bodies. Trust me, once you get a hang of it, you will see benefits for yourself as well. I won\u2019t lie, the government bodies also require your annual or quarterly financial statements etc. but it\u2019s beyond this need that the accounting benefits you.<\/p>\n
Proper accounting gives you an idea of your assets, what you\u2019re being owed to, and your most liquid funds like cash.<\/strong> It also gives you an idea of what you owe and how much you spend and earn. Since accounting is on most cases done on accrual basis<\/strong>, meaning the entry is done at the time the transaction is for (i.e. rent expense for June should be accounted into June and not July when you receive the invoice) and not when the transaction is made, you can keep a record of your period\u2019s results just as assets and liabilities as well. As a side note, we\u2019ll come to more detailed description of accrual basis of accounting later on so not to worry here if you didn\u2019t quite get it.<\/p>\n Generally speaking, accounting is a list of entries made into two statements \u2013 balance sheet and income statement both of which we\u2019ll explain later on. Each entry has two sides \u2013 debit and credit both of which must always equal (if there are say two debits and one credit, the sum of debits must equal the credit amount). And that\u2019s that. That\u2019s accounting and we\u2019ll show you basic entries in our other course for basic accounting.<\/p>\n Accounting may also seem like a huge deal of math \u2013 adding, subtracting, but truth be told, it\u2019s not that complicated. Even experienced accountants are known to add up 2+2 on their calculators so it\u2019s perfectly okay for you to use a calculator to add figures up and to double check yourself. Once we move onto the statements you\u2019ll realize that making a mistake means you\u2019ll discover it very quick so not to worry.<\/p>\n","protected":false},"excerpt":{"rendered":" Accounting is keeping record of all your financial transactions \u2013 purchases and sales, expenses and investments made for the business. Accounting is the process of rules used to reach results for your business \u2013 your assets, liabilities and profit or loss for the period.\u00a0<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26,74],"tags":[],"class_list":["post-3793","post","type-post","status-publish","format-standard","hentry","category-2-processes","category-2-7-accounting-in-itself"],"aioseo_notices":[],"_links":{"self":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/3793","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/comments?post=3793"}],"version-history":[{"count":2,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/3793\/revisions"}],"predecessor-version":[{"id":3796,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/3793\/revisions\/3796"}],"wp:attachment":[{"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=3793"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=3793"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=3793"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}