Knowing All About Accounting
Anyone who worked in an office at some point or another has had to go to accounting. They are the people who pay and send out the bills that keep the business running. They do a lot more than that, though.
Sometimes called “bean counters,” they also monitor profits, costs, and losses. Unless you are running your own business and acting as your accountant, you would have no way of knowing just how profitable – or not – your business is without some form of accounting.
No matter what business you are in, even if all you do is balance a checkbook, that’s still accounting. It’s part of even a kid’s life. Saving an allowance and spending it all at once are accounting principles.
What are some other businesses where accounting is critical? Well, farmers need to follow careful accounting procedures. Many run their farms yearly by taking loans to plant the crops. If it is a good or profitable year, they can pay off their loan; they might have to carry it over and accrue more interest charges.
Every business and every individual need to have some accounting system in their lives. Otherwise, the finances can get away from them; they do not know what they have spent or whether they can expect a profit or loss from their business.
Staying on top of accounting, whether a multi-billion-dollar business or a personal checking account, is a necessary daily activity if you are smart. Not doing so can mean anything from a bounced check to a company’s shareholders or posting a loss. Both scenarios can be equally devastating.
Accounting is information published periodically in business as a profit and loss or income statement. These are called financial statements prepared for a set period. The public can access it when the companies publish their accounting reports at the end of the financial year.