Accounting is the art of recording, classifying and summarizing of financial transactions and events. It is a process of identifying, measuring and communicating economic information to make decisions. The function of accounting is to provide quantitative information that is needed to make economic decisions.
Accounting practices has always been considered as lifeblood of a successful business. The financial structure of your company is communicated to the outside world with the help of accounting. It assists in assessing the assets and liabilities, cash flows and keep track of day-to-day transactions. Even though accounting practices doesn’t have definitive rule, every particular sector has its own rules, regulations and policies. More than the methods, its how you are using the accounting practices that matters the most. Good accounting practices like quickbooks cloud accounting can help you grow bigger and better whereas, bad accounting practices will bring you down.
Some of the most used accounting practices include:
1. Financial Accounting – Financial accounting is the form of accounting practice that is used by most company as a medium to communicate the financial performance of your company to the outside world.
2. Management Accounting – Management accounting focuses on regulating internal financial activities of companies. Managerial accounting, as some may call it, is all about analyzing business costs and operations to prepare internal financial reports, records, and accounts that assist managers in making decisions to achieve agency goals.
3. Taxation – State or federal jurisdiction regulate the operation of all business. As a company, you should be aware of the rules and regulations of your state/region and stay updated about various policy changes that take place to avoid state prosecutions that might create a negative impact on the image of your business.
Well modern accountants use a codified set of tools, rules, and guidelines for reporting financial information to corporate executives, their shareholders, and governmental regulators. Though accountants perform a wide range of duties, some of the more common tasks include preparing and filing tax return documents to the IRS, incorporating small businesses, and securing all of their employer’s or client’s records.