Accounting

Accounting

1. What is?

   • Accounting is how finances are tracked by an individual or organization, such as a small business.

2. Why is important?

   • -Evaluating business performance: Financial statements help you understand how your business is doing.
   • -Creating financial projections: Understanding your business’s financial data helps you make financial projections and make smarter decisions with your money.

3. What do accountants do?

   • Produce and analyze financial reports
   • Give a company’s internal management team the information it needs to keep the business financially healthy.

4. The different types of accounting

   • Managerial accounting:is used to generate financial statements for companies, including product costs, cash flow reports, profit and loss statements, and business acquisition reports
   • Financial accounting:It is used to assess the financial health of a business and helps management get an accurate idea of a business’s finances.
   • Forensic accounting:Forensic accounting: Forensic accounting involves auditing and accounting practices.
   • Tax accounting: Tax accounting focuses on how your business works with the IRS.
   • Cost accounting: Cost accounting examines the actual cost of doing business

5. Accounting cycle

   • Is the process your company has in place for recording and analyzing the various accounting-related events within your company.
     • 1.Identifying transactions: This is the basic step of establishing accurate and correct recordkeeping practices
     • 2.Recording transactions
     • 3. Posting transactions: When a transaction is recorded, it should be posted to a general ledger, which holds the total transactions of the entire business.
     • 4. Listing unadjusted trial balance: This is the review of your company’s finances at the end of the accounting period
     • 5.Creating worksheets: These sheets identify where adjustments need to be made to each balance.
     • 6.Adjusting journal entries
     • 7. Generating financial statements
     • 8.Closing the books: The accountant wraps up the cycle with a closing entry