Functions of Accounting are related to those statements which provide information of economic entity mainly measurable regarding money that will be used in deciding for the future plan of action from various alternatives. Functions of Accounting are; Control of financial policy and formation of planning, Preparation of budget, Cost control, Evaluation of employees’ performance, Prevention of errors and frauds.
Worksheet is a multiple column form that is used in preparing and adjusting financial statement. There are 3 types of the worksheet; (1) General worksheet, (2) Detailed worksheet, (3) Audit worksheet. For preparing accounting worksheet you must follow 8 Simple Steps to verify accounting information accuracy before preparation of financial statements. Prepare financial statements from a worksheet is relatively easy because all necessary accounting information is properly presented and structured in the worksheet.
GAAP are rules of action which are derived from experience and practice and they prove useful and become Generally Accepted Accounting Principles.
Scope of Accounting is wide and extend in business, Government, Financial institutions, organizations, non-profits, personal life and every other arena.
There are 4 steps of developing accounting system for collecting and processes financial information of any business in an efficient way.
External users of accounting information creditors, investors, government, trading partners, regulatory agencies, international standardization agencies, journalists. Internal users of accounting information are owner, directors, managers, employees of the company.
Accounting is a process of identifying and measuring quantitative financial activities and communicates these financial reports to the decision makers.
Objectives of accounting in any business are; systematically record transactions, sort and analyzing them, prepare financial statements, assessing financial position, and aid in decision making with financial data and information about the business.
Basic principles of accounting are essential and these are the general decision-making rules which govern the development of accounting techniques. 5 principles of accounting are; revenue recognition principle, historical cost principle, matching principle, full disclosure principle, and objectivity principle.
An accounting event is a financial event that would change the account balances in financial statements of a business. Any event that brings financial changes in the company and needs to record in the book.