Accounting is described as a comprehensive preparation of records of all financial transactions in a systematic way 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. Bookkeeping and tax preparation are some of the roles carried out by those individuals who engage in accounting in a business.
Financial transactions such as sales, purchases, receipts or payments that have been made to an individual or another organization that take place in a business need to be recorded by the bookkeepers at all times. Bookkeeping ensures that all the cash or credit transactions have been recorded in various correct books such as supplier’s ledger, daybook, customer’s ledger and the general ledger. It is through these financial records that an accountant is able to come up with reports on the financial situation of the business. The two common types of bookkeeping records include 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. Double-entry bookkeeping method two entries for accounting are required to make records for the transactions and can occur in the liability, asset, expense, equity or the revenue accounts.
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. The tax preparers, certified public accountants, attorneys or even enrolled agents can be hired by the business to carry out the tax preparation process. It is important for every business to file their tax returns every year and the tax prepatation includes activities such as calculation of the total tax amount and filing the tax.
Accounting persons need to possess certain qualities that indicate they are suitable to carry out their duties well. Since financial information in a business is very important, it needs not to be exposed to unauthorized persons hence the people need to be professional and ethical. They should also have proper communication skills both written and verbal to ensure that they are clear and understand everything in the field. Accountants need to have a proper customer relationship to ensure that customers obtain proper services and the issues are tackled effectively.