- Information
- AI Chat
Documents College Accounting - Accounting AND Bookkeeping Accounting
Intro To Accounting (AC 210)
University of Alabama
Preview text
ACCOUNTING AND BOOKKEEPING ACCOUNTING
Accounting is often referred to as the language of business. The better you understand the language, the better you will be able to manage the financial aspects of the company. This is due to the many financial aspects in everyday life that are based on accounting such as personal financial planning, education costs, investments, loans, car repayments, income taxes and many other aspects. Accounting is at the forefront and plays an important role in running our economy and social system. The decisions taken by individuals, governments, and other business entities are determined by their use of the nation's resources. The main purpose of accounting is to record, report and interpret economic data to be used as decision makers. There are many definitions and definitions of accounting written by experts and researchers who are experts in the field of accounting. However, accounting is generally a system for generating financial information that is used by users in the process of making business decisions. The purpose of this information is to provide guidance in choosing the best course of action to allocate scarce resources to business and economic activities. The accounting process will produce Financial Statement Information that is very useful for users of financial information both for internal companies and parties outside the company including the government. Bookkeeping bookkeeping is the procedural element of accounting just as arithmetic is the procedural element of mathematics. Throughout its development, people used computers to do most of the more detailed bookkeeping work, at all levels in households, businesses and all types of
organizations. There are two basic approaches in accounting. Both approaches are accrual basis and cash basis. The difference between the two methods lies in how and when sales revenue and costs are known. The cash base is one of the most important concepts in accounting, where recording the cash base is a recording technique when transactions occur in which money is actually received or issued. In other words, Cash basis Accounting is the basis of accounting that recognizes the effect of transactions and other events when cash or cash equivalents are received or paid that are used for revenue recognition, expenditure and financing. Cash base will record financial activities when cash or money has been received suppose the company sells its products but the payment money has not been received then the recording of product sales revenue is not done, if cash has been received then the new transaction will be recorded. The cash base can be calculated using the following formula: initial cash - revenue cash sales-payment cash-final cash accrual base has a recording feature where transactions can already be recorded because the transaction has implications for incoming or outgoing money in the future. Transactions on an accrual basis are recorded at the time of occurrence even if the money has not actually been received or issued. In other words the accrual basis is used for the measurement of Assets, Liabilities and equity of the fund. So the accrual Basis is the accounting basis that recognizes the effect of transactions and other events at the time of the transaction and the event occurs without regard to when cash or cash equivalents are received or paid. The role of accounting in the company every company that has been legally registered in Indonesia is required to make accounting reporting. The obligation to
Oldsmobile, Cadillac and Pontiac. General Motors management treats each division as a separate accounting entity. Suppose that sales in the oldsmobile Division have drastically decreased, the management will look for a way out to solve the problem. But if the sales of the division is not separated, then the management will be difficult and do not know that one of the divisions experienced a decline in sales. Reliability principle reliability principle is a principle that relies on data that can be proven, traced the truth, and can be confirmed by anyone who is independent. Therefore, accounting records should be based on data from a business activity based on objective evidence. Cost principle the cost principle is a principle that states that assets and services that are obtained are recorded according to their actual price (historical value) even though the buyer believes that the price paid is obtained as a result of bargaining, but the goods must be recorded at the price that actually occurs and is paid at the time of obtaining or the transaction. Example: an electrical store gets merchandise in bulk from other electric tiko that is no longer operating worth Rp. 1.000, -, the price of these items when buying at a distributor where kulakan usually worth Rp. 2.000,-. In this cost principle, the electrical store must record the purchase results based on the acquisition price of Rp. 1.000, - although the price of the goods should be worth Rp. 2.000,-
Documents College Accounting - Accounting AND Bookkeeping Accounting
Course: Intro To Accounting (AC 210)
University: University of Alabama
