Something to always keep in mind is having your accounts being prepared in compliance with the regulation your operating in (laws and other regulatory acts governing doing business and taxation) and with the accounting framework you’ve chosen (either your local Generally Accepted Accounting Principles (also called “GAAP”) or something that’s globally used like International Financial Reporting Standards (also called “IFRS”). 

The reason to keep your accounts and more importantly your business and transactions in line with all relevant regulation should be obvious. Otherwise your contracts are not valid, you may not be allowed to do business, your missing some filings required, you’ve calculated your taxes inaccurately etc. This all would result in either fines being charged to your company or simply going out of business because you’re deleted from the commercial register. Of course those actions the government officials can take are dependent on your countries regulations, but the point is that you should always know a way around them for at least a little bit. And if ever in doubt, always consult.

Your accounting framework is also something you ought to keep your business compliant with. When those basic entries are globally accounted the same and it comes down to the very foundation of accounting which we’re focusing on in our Basic Accounting course as well, you do want to consult your accounting framework when it comes to accounting those transactions that don’t happen on daily basis for an example or which are even more irregular and happen once in years (like impairment and so on). This is what the accounting framework is mostly for, telling you how to account in such occasions (and even so not the entries themselves but merely if and in which amount the entries should be done). Again, the entries are something that are the foundation anyway and work the same, it’s the accounts you show the transaction on that sometimes is regulated in the framework, yes, but hardly ever the entries themselves.

So always make sure that what you do and what you show as your companies results and other reports are always compliant with relevant regulations and frameworks being used. And not to worry, we’ll come to the tools to help you in doing so.