![]() Expense accounts: Selling, general, and administrative, interest, repairs, depreciation (non-cash), amortization (non-cash) and othersįinancial statements are the end results of the completed accounting record.Revenue accounts: Sales revenue and others.Equity accounts: Common stock, additional paid-in capital, retained earnings, treasury stock (contra account) and others.Liability accounts: Accounts payable, notes payable, accrued expenses, deferred revenue, long-term bonds payable and others.Asset accounts: Cash and cash equivalents, accounts receivable, inventory, allowance for doubtful accounts (contra account), prepaid expense, investment, property, plant, and equipment, accumulated depreciation (contra account), intangible assets, accumulated amortization (contra account) and others.For example, cash assets may include several different cash and savings accounts. Each account type includes sub-accounts to record transaction details. There are five different types of accounts: asset, liability, equity, revenue, and expense. Public accounting firms have several different clients, whereas private accounting refers to working for one specific business entity. ![]() ![]() Advisory services perform general financial consulting. Audit roles test the validity of financial statements and internal controls. The tax field focuses on federal, state, and local tax filings. Accounting professionals are generally divided into three fields: tax, audit, and advisory. Small business accountants may assume general roles which require preparing the records (bookkeeping) and performing bank reconciliations. Private (internal) accounting generally refers to accountants who work within a single business entity. Stakeholders utilize financial statements to help make business, lending, and investment decisions.Īccounting has several specialized fields and roles. The system is largely self-regulated and designed for the users of financial information, who are referred to as stakeholders: business owners, lenders, employees, managers, customers, and others. It provides an essential tool for billing customers, keeping track of assets and liabilities (debts), determining profitability, and tracking the flow of cash. Accounting is the system of recording financial transactions with both numbers and text in the form of financial statements.
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