![]() The advantage of a double-entry accounting system is that it assures accuracy. This method is the best way to keep track of asset and liability accounts. The “creditor” account is then increased by the same amount. For example, if your company wants to pay off a creditor, the “cash” account is reduced by the amount you owe to the creditor. You enter a debit in one account and a credit in another for each transaction. You keep a two-column ledger: one for revenue and one for expenses.Ī double-entry bookkeeping system has two columns, and each transaction is located in two accounts. Single-entry bookkeeping is a good choice if your business is small and has a low volume of activity. Organized financial records provide insight into how your business is performing and aids you in managing cash flow. In some cases, this information is needed only at the end of the year for tax preparation.Īn accountant takes a bookkeeper’s work, analyzes the data and prepares financial statements for the company.īookkeeping is an important tool for businesses. Depending on the size of the company, quarterly reporting may be required. accountingĪ bookkeeper ensures that all financial transactions are recorded and organized for financial reporting.
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