From Business point of view (also see: accountancy )is very important.
Behind every business, the prime objective is to make money, helping keeping
the check and balance is very important as finance is very risky and sensitive matter.
The role of money is such that it comes in and goes out every time a transaction
is made. Here the job of accounting department comes becomes obvious as it closely monitors this in
and out) cycle by taking into consideration the analyzing of transaction
patterns and recording transaction patterns carefully as well as dealing with
things like payroll and taxes.
In a nutshell an Accounting department is responsible for
over all financial health and efficiency of any business. And by apply a proper
control method it actually regulates ,
monitors and enhance the profits.
Accountancy?
The two main methods of accounting are based on cash and
accrual.
1-
Cash Accounting
This is of accounting method is usually carried by the many
small businesses, which are not involved in huge (bulk) money transactions. Here
the amount of of money intake and
dispatched is small. It acknowledges and records financial transactions
when cash physically moves between involved parties.
2-
Accrual method
If
the money is exchanged on the basis of clearing over a certain term/
period in the future, this type of transaction is usually called Debit based.
The exchange of services between people on the promise that money (would be) to
be delivered in future on the specified terms.
The accrual method tracks all commitments to pay or to be
paid when the commitment is made, regardless if actual funds were transferred.
This method is typically used for larger businesses.
Courtesy: HeartlandsAccounting
