What is Accounting?

                                   

                                    What is Accounting?

It is the science to record the transactions. It is also art to transfer the values from bill, vouchers, invoices, receipts and cash memo to day book. We can explain accounting as the system of scientific recording which is used for calculating  the net profit from all the transaction. Whole accounting system is worked on the following accounting equation.

 Assets = Capital + Liability

                          What is the definition of Accounting?

 To record financial transaction  is accounting.

In accounting, transaction is the contract between buyer and seller for buying and selling of goods, asset or service. It is also exchange of money from one party to other party when goods and services are bought and sold on credit. It means when we buy the goods, it is the transaction. When we sell the goods, it is the transaction. When we get any service, it is the transaction. When we provide the service, it is the transaction.

                   What is the simple definition of Accounting?

Ans. Journal → Ledger → Trial Balance → Manufacturing Accounts → Trading Accounting → Profit and loss accounting → Balance sheet → Cost Sheets → Budgets → Trends → Ratios → Cash flow statements → fund flow statement

                             

                                History of Accounting 

Like any other invention, accounting is the invention of India because sufficient evidence exists to lead one to conclude that the art and practice of accounting, as a highly developed system, was  in India even during the times of the Vedas. There are lots of direction in the Vedas for getting success in the trade. One of them is to record each transaction like recording any other text. Because Indians had complete knowledge of accounting, so they taught accounting to the other country's trade. We know that we had the trade with Africa. We sold many things to Africa and obtained the Gold. We had taught them to record each transaction for success in the business.

                                

                             Branches of Accounting 

 Accounting is just like a tree. Financial accounting, cost accounting, corporate accounting and management accounting are its main branches.

                                  Accounting Software

Today, accounting records are kept with the help of accounting software. There are lots of software companies who sell accounting software in the market. You can choose anyone from them. We are providing you the top list of accounting software in the market. You should also study the list of accounting software mistakes.

  NOT BACK-UPS

This is the first accounting software mistake which are done in accounting departments. When accounting department completes his voucher entries in accounting software, they feel safe.

• This is the mistake because all accounting software has the system and which is done by some codes which knows the computer programmer. So, it may be crashed. It may be delete your all database in one second. At that time, you will pay big fees to computer programmer for restore his database because there are lots of useful accounting information in your database. 
• There are lots of natural disaster which may destruct your all accounting software data. For example, in India, previous year, we see big flood in Uttrakhand and this year, we see big flood in Jammu and Kashmir. So, if you have the branch in this area and you did not back-up your accounting software data, you will unable to restore it from your other branches or from cloud. 

So, better is make the good time table of back-ups of your accounting software database. You can back up daily, weekly or monthly as per the quantity of data entry.

NOT PROFESSIONALS

Few years ago, I had obtained a query from a computer programmer who is developing a special accounting software for a company. He is getting my advice relating to process of any special accounting function. I suggested. So, he developed same. Now, same software is working by whole company. If I am not professional in accounting area, my wrong suggestion will make wrong accounting software and no one can save from this mistake even there is CA who will record in same default accounting software. My main aim of teaching that you should not hire any person who is not professional of accounting. It means not to go cheap accountants but get quality service from great accounting professionals.

NOT UPGRADE 

Time to time, accounting software companies updates their accounting software. You just switch to its upgrade version. But you are lazy or you do not want to invest more money in its upgrade version but it increases your cost because when you will use not upgraded accounting software, there is more chance it may be corrupted or showing errors during accounting record.

NOT TRAINING

In this world, everything is changing fastly. So, due to changing of business system, accounting softwares are also changing fastly. If your business has to run fast and catch all the changes, it has to accept all changes in accounting system as challenge. As businessperson, you should give training to your accounting department employees. If you are saving your money by not providing training relating to latest in accounting software, it is your big mistake because untrained employee will do more mistake if you update the accounting software but did not manage the training relating to such updates.

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