Accounting is one of the most important subjects that acknowledges about how to keep records of a company. In corporation sector records are always essential. It is completely related with the transactions of a business. Assets, capital, liability, and many other things are essential for a company. However, doing journals and completing transactions are not quite simple. You will be able to complete your course in a proper way when you understand the subject accurately.
It is always important for one to go through the topics and understand terms. However, here you will get how this subject is essential and how to make your study easier and convenient? Let us know about the subject in brief before you plan to do something.
A business needs different fields to keep its record accurately. You must know about purpose of accountings and its topic. These are essential for students from the beginning. To understand this subject you must cover some important points. Now go thoroughly and take assistance to guide yourself.
Know the fundamentals
When we talk about the fundamentals some important things should be clear to a student. Fundamentals mean all those terms which you use several times while entering records in transactions. These are โ
- Assets
- Liabilities
- Capital
- Drawings
- Expenses
- Income
- Expenditure
- Revenue
- Payables
- Goods
- Cost
- stock
- Profits
- Loss
- Debtor
- creditor
- Vouchers
- Discount
- Transactions
- Debit / credit
- Solvent
- Equity
These are the most common terms, but without proper knowledge of these terms you will not be able to understand anything much in accounting. The debit side and credit side of a transaction requires all suitable information. So, before you are going to understand a question, you must understand all these terms to overcome any confusion.
There are mainly two methods through which transactions are done, these are โ
- Traditional method
- Modern method
You must know both of these methods for getting the right answer though you transaction.
What are the various types of transaction?
You should also know about the types of accounting. There are mainly five different types of accounting. These are โ
- Financial accounting โ
This is the types of accounting in which all records of transactions are related to its financial section.
- Cost Accounting โ
This branch estimates the production cost for any service or goods manufactured by a company. Through the study of this branch production cost is controlled and a proper budget decides the future cost.
- Management Accounting โ
Planning is important for a company. Through management accounting, all records of financial accounting are evaluated and analyzed as well as interpreted.
- Taxation Accounting โ
The different fields of this part of accounting are sales tax, income tax, tax on excise duty etc.
These are the most common in the worldwide. However, the recent searches also think and apply the rules of accounting in the following types. These are –
- Human Resources
- Social Responsibility
- Inflation
- Government
Types of accounting indicate that how much responsible each section is. Each one has some different task than other.
Who are the users of accounting?
The different users are โ
- Internal Users
- External Users
What do you mean by internal and external users in accounting?
A company runs a business โ A lot of competition is there and to run a business properly, a company needs to share information with the top level managers of own company and other companies. Managers within company take information for planning or for further use and do not share their information with any outsider. They are internal users. They are โ
- Owners or proprietors
- Management
- Employees
Now, there are some external uses also who need information up to a limit. It means external users are not allowed to go through the whole.ย They are โ
- Investor
- Proprietors
- Creditor
- Bank or other financial institution
- Government
- Trade unions
- Stock exchange
- Competitors
- Political parties
- Taxation authorities
- Media
Now, it is clear that a few parties are interested to know the profit while competitors are there to compare with their profit in a particular time period. It indicates the importance of different reports as balance sheet, journals, double entry system and many others. So, external and internal both need proper knowledge about this.
What are the subjects related with accounting?
If you really want to be the master at the college level study, then you must know that there are some other subjects are related with this. Moreover, you just need to go through those subjects also. These are โ
- Accounting is related with Economics โ
Various data developed in economic model is related with accounts. Capital, cost, asset along with other firmโs related conditions are related with economics and then the records are analyzed by accountant to keep the records.
- Statistics is related with accounting–
Various methods and evaluations in statistics are essential for accounting to keep records perfectly. Variables with their coefficient are important for an accountant.
- Accounting is very important in Management โ
Management is important for making future plans and taking various decisions based on that. Accounting helps by providing the exact figure or data to the management through which managers can easily take decisions
- Engineering and accounting are related–
Manufacturing of products, stock, increase or decrease price and production cost as well as reduction cost are [art of accounting. All these are interrelated with engineering as they do all work on the basis of data available.
- Law and accounting are related โ
Accounting follows some particular law for doing business. These laws are essential to follow according to the government rule for a company. You can say that partnership act, income tax act, sales tax act and many such acts are important. A business also needs to follow acts of other countries in case of exporting materials. Only after that it will be able to dispatch products.
- Mathematics and accountings โ
Accounting needs different calculations. Measurement, derivations of interest and interest rate, annuity, depreciation and all fundamental calculation as addition, division, subtraction and multiplication are important for accounting.
Now, it is clear that when you think of becoming expert in accounting, then you must understand its importance in different other subjects. You should know that how subjects are interrelated with each other.
Importance of Accounting equation
Assets = Capital + Liabilities
This equation is popularly known as โBalance Sheet Equationโ. Balance sheets are prepared on the basis of the exact value of capital and liabilities. Now, let us know how they are related.
In case your liability increases, then asset will also increase. However, for a healthy business it is always important to have a good capital and that must be less than liabilities. You will surely understand this when you do some transaction based on this accounting equation.
You can also write the equation as
Capital = Assets โ Liabilities
This formula indicates that in case creditor or a liability is more than asset value, then it will negative value, and this is not good for a business. So, management always works for improvement in business. Though negative value comes rarely, but there is probability of getting this situation.
What are the various types of accounting system?
These are โ
- Cash system
- Single entry system
- Double entry system
An accountant needs to understand these systems for preparing journal. Cash system deals with cash receive for an organization and not for any company. ย Cash system is applicable for colleges, school, hospitals etc. Single entry indicates how to prepare cash account for a company and thus this is not considered as an exact account as this creates difficulty.
The most essential accounting system is double entry as this is the latest methodology and indicates that there are two possibilities of an entry system.
Each transaction has two sides as one side is receiver and other is giver. When you talk about a journal system, then you have two different fields for entry. Suppose, โproducts soldโ needs an entry system, then cash account is receiver as company gets cash and goods account is the giver as the number of products has sold out. So, there are two sides of the same transaction.
How to will you prepare accountings to be a master?
After understanding the fundamentals and requirement of accounting you must follow some steps. These will help you in improving your knowledge. These are โ
- Understand every term โ
When you will prepare journal entries, you will see a number of questions. These questions give you information and on that basis you just need to find out the value for debit, and credit. For normal transaction you just need to write capital, asset and liability. So, a clear view should be there before you start doing transactions.
- Practice every day โ
Accounting needs proper practice to understand the different types of cases. If you do not give time to practice, it will be very difficult to solve or even understand a question in the examination hall. So, be careful and make everything perfect accordingly. Try to go through different types of entries for a good grip over this subject.
- Complete assignments โ
You will be a master only when you score well in your examinations. Assignments give an idea about the questions related to a topic. So, if there is an assignment, then without thinking much a student should go with all questions. Many times questions are not understandable of an assignment; at that juncture you can easily take help of your seniors or online experts.
- Be careful in calculation โ
In journal entries when you calculate then both sides must have equivalent outcome. In case credit side is less and debit side is more or vice versa, then it is essential to check the whole records one by one. So, calculation part must be perfect.
- Must have knowledge of economics, statistics and mathematics โ
As some subjects are connected, so you should concentrate on those concepts which are connected with accountings. You cannot ignore, and thus be careful while you apply formulas of statistics or mathematics.
Computer is also connected with this part and it needs clear view. So, you must need to prepare according to the study requirement.
- Solve projects as much as possible โ
It is always important to solve number of cases to understand this subject in reality. This will assist a student in completing projects accurately and promptly.
How online assistance is perfect for students of accountings?
If you have doubt in any question or in any section or topic in accounting, then you can easily opt for online help. Many students take and get positive result. Now, you must have a question that how it will help you? Online assistance is provided by online tutorial and for that you must select a reliable online service provider.
When you apply for assistance, then experts on the other end will help you immediately. They are highly qualified and able to solve out all sums and projects of this subject. Experts explain everything in a systematic manner to make solutions completely understandable for students.
Some facilities will give you an exact idea about online assistance. These are โ
- Students can easily apply for their projects and other issues any time and on any day. Online assistance means 24 hours facility in all days of a week.
- On time delivery of service is another prime factor. Not only they complete assignments on behalf of students, but experts deliver assignment-solution before time. So, many students ask at the very last moment for solving problems.
- These solutions and explanations are free from plagiarism.
- Experts assure that all solutions, transactions, graphs, and projects are cent percent accurate. Along with that these are free from any grammatical error.
- A reliable service provider understands importance of projects and thus, charges are completely affordable to students.
Now, it is clear that if you follow answers and learn according to that, everything will be easier to you. So, understating this subject and practice after that will make you more confident. A student should also know about the purpose of the topic. Different journal entries are the prime aim of this subject. So, you have to concentrate on each one. If you try and work according to that, then you can easily be the master in accounting.
Author Bio:
Michelle Johnson is a popular faculty in Cambridge University. She has MBA degree and she has more than eight years of experience. Along with that she also assists student through online. Anyone can easily contact and get help for accounting assignment or projects.