Accounting It is a term that everyone knows. But what is an accounting, and What does it consist of? And why should a bookkeeping be kept? Accounting is made Up of diaries. This allows you to keep track of revenue and expenses. The five most used Diaries are Purchase, Sales, Bank, Cash, and Memorandum. To get a real insight Into the company’s financial flows, more is needed. For this purpose, ledger accounts Are used. You can keep a standard billing schedule, or manage your schedule. By creating journal entries, you can see which ledger account is being booked.
Accounting does not mean anything else than the recording of financial facts, to ensure that there is an insight into the finances and to accountability to agencies. Accounting is legally required. The figures must be shown to agencies, including the Tax office. Furthermore, it is also obligatory for BV’s to report the annual accounts to the Chamber of Commerce every year. But, of course, accounting is not just because it is mandatory. To have a excellent overview of all the things that matter, it is good to have insight into the Financial administration. What costs did you make for the past year, and what? Is the company profitable?
How has an account been built?
Accounting can be divided into three different cases. So you have the diaries. Here you can register all revenue and expenses. Standard will be there. Five diaries used in accounting. But of course, you can make as much as You want yourself. The five most used diaries are:Purchase – All purchase invoices are registered. Sales – All sales invoices are registered. Bank – All bank statements are registered. Cash – All cash purchases and sales are included in the cash book. Memorandum – This is a diary in which all bookings are made that are not Belong in another diary. Often these bookings are very incidental come.
Also, there is also the ledger. The ledger is a collection of all Ledger accounts. With ledger accounts, it is possible to gain insight In all financial flows that deal with the company. Get all ledger accounts Assigned an own unique number. The first figure that they consist of indicates What kind of account is it? There is also a ‘standard’ billing schedule, which often. can be used.
0 – Fixed Assets1 – Current assets2 – Interconnections (crossing costs)3 – Stocks4 – Cost accounts (of non-goods)5 – Projects6 – Projects7 – Cost reports (of goods)8 – Sales accounts9 – Deductions
To make this something more transparent, here are some examples:
1600 creditors, 3020 stock goods, 1720 receivable VAT 19%. Of course, these data mustalso be reflected in the balance sheet and income statement. The data found in thebalance sheet are Those from the following categories:
0 – Fixed assets, 1 – current assets,2 – interim accounts,3 – stocks, 5/6 -Projects.As you can see, all statements that are reflected on the balance sheet, reportsshowing your assets and debts.
The following accounts can be found in the income statement:
4 – Cost reports (of non-goods), 7 – Cost accounts (of goods), 8 -sales accounts, 9 -difference accounts. The income statement shows all ledger accounts that explain the costs and showreturns.
The daily recording of financial data is done using journal entries. In a journalentry, you can see which ledger account has changed is becoming. You always start withthe debit side. The debit side stands for the wise on which the assets are present(e.g. on the bank or in goods). Credit stands for The way in which the assets areobtained (e.g., using loans, mortgage). Debt is always left on balance, and confidenceis always on the right.