Accounting: An introduction
The history of accounting has been around almost as long as money itself accounting history dates back to ancient civilizations in Mesopotamia, Egypt and Babylon.
"Accounting is the process of recording financial transactions pertaining to a business. The accounting process includes summarizing, analyzing, and reporting these transactions to oversight agencies, regulators, and tax collection entities. The financial statements used in accounting are a concise summary of financial transactions over an accounting period, summarizing a company's operations, financial position, and cash flows."
Luca Pacioli is considered "The Father of Accounting and Bookkeeping" due to his contributions to the development of accounting as a profession.
By 1880, the modern profession of accounting was fully formed and recognized by the Institute of Chartered Accountants in England and Wales.4 This institute created many of the systems by which accountants practice today. The formation of the institute occurred in large part due to the Industrial Revolution. Merchants not only needed to track their records but sought to avoid bankruptcy as well.
TYPES OF ACCOUNTING
Managerial accounting uses much of the same data as financial accounting, but it organizes and utilizes information in different ways. Namely, in managerial accounting, an accountant generates monthly or quarterly reports that a business's management team can use to make decisions about how the business operates. Managerial accounting also encompasses many other facets of accounting, including budgeting, forecasting, and various financial analysis tools. Essentially, any information that may be useful to management falls underneath this umbrella.
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Financial accounting refers to the processes used to generate interim and annual financial statements. The results of all financial transactions that occur during an accounting period are summarized in the balance sheet, income statement, and cash flow statement. The financial statements of most companies are audited annually by an external CPA firm. For some,such as publicly-traded companies, audits are a legal requirement. However, lenders also typically require the results of an external audit annually as part of their debt covenants. Therefore, most companies will have annual audits for one reason or another.
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Financial Accounting
Managerial Accounting
Just as managerial accounting helps businesses make decisions about management, cost accounting helps businesses make decisions about costing. Essentially, cost accounting considers all of the costs related to producing a product. Analysts, managers, business owners, and accountants use this information to determine what their products should cost. In cost accounting, money is cast as an economic factor in production, whereas in financial accounting, money is considered to be a measure of a company's economic performance.
While financial accountants often use one set of rules to report the financial position of a company, tax accountants often use a different set of rules. These rules are set at the federal, state, or local level based on what return is being filed. Tax accounts balance compliance with reporting rules while also attempting to minimize a company's tax liability through thoughtful strategic decision-making. A tax accountant often oversees the entire tax process of a company: the strategic creation of the organization chart, the operations, the compliance, the reporting, and the remittance of tax liability.
Cost Accounting
Tax Accounting
ACCOUNTING
SOFTWARE
PACKAGES
Accounting software refers to specialized computer programs designed to help businessesmanage their financial transactions, recordkeeping, reporting.
These software solutions provide tools and features that simplify various accounting tasks,including invoicing, bookkeeping, payroll management, tax calculations, and financial analysis.
1.Tally Prime
TallyPrime is an accounting software widely used by businesses in India. It offers features for managing financial transactions, generating reports, and complying with tax regulations.
Features: Tally Prime provides tools for bookkeeping, invoicing, inventory management, and tax calculations. It also offers features like bank reconciliation, payroll processing, and budgeting.
2.Zoho
Zoho is a suite of business applications that includes Zoho Books, an accounting software designed for small businesses. It offers features for invoicing, expense tracking, and financial reporting.
Features: Zoho Books provides tools for creating invoices, managing expenses, tracking inventory, and generating financial reports. It also offers features like project management and time tracking.
3. Voloplay
Voloplay is an all-in-one financial management platform that combines expense management, corporate cards, bill payments, and integrated accounting features.
Features: Voloplay offers features for expense tracking, expense approvals, virtual corporate cards, and bill payments. It also provides real-time financial reporting and integration with popular accounting software.
4. QuickBooks
QuickBooks is a popular accounting software known for its user-friendly interface and powerful features. It caters to the needs of small and medium-sized businesses.
Features: QuickBooks offers tools for invoicing, expense tracking, bank reconciliation, and financial reporting. It also provides options for payroll management, inventory tracking, and tax preparation.