What is accounting and why should we study accounting?
They prepare and review the financial information that is relied upon by investors, lenders, businesses and other organizations throughout the world. Accountants also provide expert advice on taxes, financial planning, information systems and a wealth of other business matters. Department of Accounting.
What account type is petty cash?
Petty cash is a current asset and should be listed as a debit on the company balance sheet. To initially fund a petty cash account, the accountant should write a check made out to “Petty Cash” for the desired amount of cash to keep on hand and then cash the check at the company’s bank.
What is the job of an accountant in a company?
An accountant performs financial functions related to the collection, accuracy, recording, analysis and presentation of a business, organization or company’s financial operations. In a smaller business, an accountant’s role may consist of primarily financial data collection, entry and report generation.
What is the main purpose of accounting?
The main objective of accounting is to record financial transactions in the books of accounts to identify, measure and communicate economic information. Moreover, tax reporting agencies require you to keep books at a minimum level that tracks income and expenditure.
What is basic principles of accounting?
Accounting principles are the rules and guidelines that companies must follow when reporting financial data. The Financial Accounting Standards Board (FASB) issues a standardized set of accounting principles in the U.S. referred to as generally accepted accounting principles (GAAP).
What is a positive impact of GAAP?
GAAP guidelines help businesses maintain consistency in their presentation of financial information, reduce the risk of misrepresentation and avoid fraud. GAAP was created to safeguard the rights of stakeholders, including investors.
What is petty cash float?
The float is the maximum amount that can be held in petty cash at any time. The amount disbursed from the petty cash should be reimbursed when the fund falls to the level at which it must be replenished.
What are the advantages of accounting?
Advantages of Accounting
- Maintenance of business records.
- Preparation of financial statements.
- Comparison of results.
- Decision making.
- Evidence in legal matters.
- Provides information to related parties.
- Helps in taxation matters.
- Valuation of business.