Then a thorough analysis of these financial statements takes place in this process. After that, all the transactions are summarized in the form which is presentable to the users of the financial statements. The transactions are grouped with the other similar-natured transactions into common groups. The monetary transactions are identified and organized systematically in accounting. It starts with recording the transactions and ends with reports of the financial statements at the end of the financial year. It provides information on the financial status of the organization. This will help him to know the true and detailed financial position of the company.Īn accountant supervises the bookkeeper and works together with him/her. Bookkeeping is also very important for the users of financial statements such as government, investors, and financial institutions.Īn investor always goes through the financial statements and books maintained by the company before investing in it. Most industries follow a double-entry system in maintaining financial statements.ĭuring the process of accounting, bookkeeping provides easier access to the book’s financial history. Whereas in the case of double-entry bookkeeping, transactions impact both the sides of accounts that are credit and the debit side. In this, transactions are recorded either on the credit side or debit side. Single-entry bookkeeping means entering only one-sided transactions.
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