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Ensuring Proper Financial Records

Accounting is the systematic method followed in comprehensive preparation of all financial transactions in a business. It can also be described as making summaries of the financial transaction reports, analysing them and making reports on all these transaction to agencies that oversees activities such as auditing in a business as well as the entities required to collect tax. Each business is required to have an accounting segment which varies depending on the size of the organization where accounts can be handled by accountants and bookkeepers for the small entities and a finance department with a number of employees for large companies. Accounting ensures that the businesses are able to come up with informed decisions through the financial reports they are presented with. The roles carried out in the accounting section includes bookkeeping and tax preparation.

Bookkeeping involves recording all transactions in a business such as sales, purchases, receipts or payments that have been made to an individual or another organization. There are various record books where a bookkeeper is required to record both the cash and credit transactions which includes the supplier’s ledger, daybook, customer’s ledger and the general ledger. With proper bookkeeper’s record, an accountant is able to come up with reports on the financial situation of the business. There are two common entry systems in bookkeeping which includes single-entry and double-entry bookkeeping system. It is only the expense and income accounts can be recorded in the journal for expenses and revenue single-entry bookkeeping method. It is important to have two entries for accounting in order to make records for the transactions and can occur in the liability, asset, expense, equity or the revenue accounts in the double-entry bookkeeping system.

Appropriate tax returns can be filed for the business to the responsible body every year in the process known as tax preparation which is a role in the accounting field. Other that the people involved with accounting doing the tax preparation, the business can also look for a suitable tax preparer, certified public accountants, attorneys or even enrolled agents at a fee. Tax preparation through processes such as calculation of the total tax amount and filing the tax is crucial for a business which ensures that it is compliant to the laws of the region it operates.

There are certain qualities that show an individual can work well in the accounting section in a business. The individuals need to be professional and ethical in everything they do so that they are able to keep financial matters away from unauthorized persons. Accountants need to have a proper communication ability both in written form and verbal to ensure that they have a clear understanding of all issues in pertaining to finances in the business. Accountants need to have a proper customer relationship to ensure that customers obtain proper services and the issues are tackled effectively.

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