Accounting is the Life Blood of Business:
Accounting is the lifeblood for the stable operations of the
business. Capital is essential, but when there is no precise system for
maintaining check and balance. And to know how banking is going in and out of
business, businesses cannot run efficiently.
We need a healthy accounting system in business because only
then companies can grow and flourish. Accounting is the backbone of the
business world. If there were no accounting, the trading world would have been
a disaster. Accounting was being created in answer to the growth and
development of trade and commerce in medieval times, and it has been moving on
since then.
Research infers that it was Italy, where first accounting
entries were done. 1494 was the first time the accounting business was
published by a Venetian monk. Accounting is an ordered methodology that
involves procedures for record-keeping and accounting has been around for as
long as business and trade industries. The information and laws upon which the
accounting practices base have changed only insignificantly across the years.
The primary concepts and methods are still very much the same as they were hundreds
of years ago.
The central core concepts of accounting assets, liabilities,
income, and the need for reconciliation of these areas is still the foundation
on which the accounting practices of today lie upon. In the last twenty decades,
the process of record-keeping of these transactions. And the various other
reports that are being compiled with the information have evolved gradually in
the last two centuries.
Or the effective running of a business, accounting provides
us with the financial picture we need to make active business and financial
declarations. It gives us the awareness to make use of our resources about the
current status and future wellness of the business.
Accounting
is basically classified into two basic categories:
1. Financial
Accounting
2. Managerial
Accounting
The information that companies make public like creditors,
shareholders, suppliers, and customers; this information is used in financial accounting firms in Dubai.
Managerial
accounting uses the information which is not open to the public like
salary costs, profit targets, material control information, and cost of
production. The information that is supplied by the managerial accounting is
for the use of division managers, department heads, and supervisors so that
they can make informed decisions regarding the daily operations of a business.
Businesses should be held responsible for the methods they
choose to run the business as the potential for theft, greed, and dishonesty
exist in all businesses. Specialized accounting services areas, when enforced
right, can eliminate even the possibility of fraud. When income taxation and
auditing are conducted appropriately, it makes businesses account for all the
income, transfers, and transactions and to pay their fair share of tax. The key
is the correct implementation and enforcing of principles.
Accounting tends to be the consciousness of business. When it
is carried out with respect, care, and caution, it performs way beyond
expectation. Greed and dishonesty disrupt the whole system, but it is only
through accounting that one can detect any wrong intention or use of resources.
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