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Accounting is defined as the systematic collection, recording, and classification of the transaction. It is a body of knowledge consisting of experts whose job is to interpret and communicate the financial statements. Accounting involves not only preparation of profit and loss statement but is also concerned with the preparation of statement of affairs of business. Information related to the requirement of different organizational resources is recorded through the process of accounting. The accounting process also manages the information about the financial needs necessary to procure the resources. At the solve my accounting paper, experts explain in details about what is the accounting.
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There are certain rules and regulations called accounting principles that are necessary for a company to conform to. One can see that accounting principles are just some set of standards and they provide the structure within which a company is required to function. As per the description of the solve my accounting paper online, generally, accounting principles are the set of rules that form the accounting principles.
Accounting is a process which involves recording, classifying, summarizing and interpretation of transactions.
The statement which depicts the state of affairs of business is known as the balance sheet. Balance sheet consists of the assets of the firm which is classified as current and non-current assets, and it also consists of liabilities and the funds of shareholders. Balance sheet highlights and depicts the current state of affairs of the business.
A statement summarizing and evaluating the operations of an organization is known as the profit and loss statement of an organization; this statement shows the success level achieved by an organization regarding its profitability. The profit and loss statement represents the fact whether in the current accounting year business has produced any profit or suffered a loss. At solve my accounting paper, the explanation of profit and loss statement is strategically emphasized.
The cash flow statement represents the outflow and inflow of cash that has taken place in an organization during an accounting year. The flow of cash in the form of payment and receipt is highlighted in the cash flow statement which further helps in interpreting and communicating the state of the business. If the inflow of cash is more than the outflow of cash, then it shows the positive cash flow, and in vice versa situation, it is known as negative cash flow. As my accounting paper online suggests, cash flow is a reflector of the operations and status of the business of an organization.
A trading account displays the expenditure and income generated via chief operations of the business; this account shows what expenses and income occurred during the process of production and consists of all the direct expenses and income.
Comparison of the balance sheet of an organization over the period of two years is shown with the help of comparative balance sheet. While making such comparison, current year is taken as the base year and the balance sheet value and data of succeeding year are compared so that a comparative analysis of the organization can be prepared for the current and the succeeding year.
Revenue expenditure signifies the day to day and recurring expenses incurred during the business activity of the organization. These are the everyday expenses of the business and are incurred on a routine basis.
The expenses which are non-recurring and do not belong to the business expenditure that has taken place during the accounting year are called capital expenditure. They usually represent the purchase of the capital asset, which helps the organization in enhancing its profit earning capacity.
Organizations are engaged in various dealings and transactions, wherein they are under obligation to pay to creditors and outsiders; such payment is known as accounts payable.
In some cases, it happens that outside parties and stakeholders in debt of the organization; in such a situation company has developed account receivables as the company is anticipating to receive money from the external parties.
Under this approach, the emphasis is not on the actual generation of the transaction but the recognition of an item. Firstly, prudent estimates of the transactions are done, and after that when these transactions are realized, the accrued income and outstanding expenses are calculated.
Cash basis method is focussed on recognition of transactions when they are truly generated and is concerned with the actual generation of income and incurring of expenditure. In this approach, transactions are realized as and when they occurred.
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