Every industry has its own secret language to communicate, and so does a business industry. This language is known as accounting. So, to get into the inner circle, you must learn this lingo first. It is where many students get stuck and seek accounting assignment help, as there are various terminologies. To get along with this, have a look at the definition of it:
It is the system of summarizing and recording financial transactions or activities, along with analyzing, reporting, and verifying the results. In other words, it is the process of tracking the financial activities of a business. It is also known as the language of business. It measures the outcomes of a company’s economic activities and shares this information with its shareholders and investors. Collecting this information is not everyone’s cup of tea. Therefore, many students seek assignment help from professionals for the same.
After learning the basic definition, have a look at the various types of this language:
This accounting language has some categories that are as follows:
- Corporate Accounting
This type of accounting is the procedure dedicated to the operations of a company. It includes the use, handling, and filling of an organization’s financial data for the purpose of tax compliance and external reporting. The motive of this accounting is to provide investors with information on the assets and liabilities of the company.
- Public Accounting
This type of accounting is a business or an individual who gives services to various clients. These clients can be individuals or corporations as well. The responsibility of a public accountant is to work on tax regulations and financial reporting. In addition, they should have up-to-date knowledge of tax codes and GAAP as well. Their motive is to prepare the financial statements of the company. Performing audits and advising related to taxation, assurance services, and financial consulting.
- Government Accounting
This type of accounting is the procedure of managing and recording all the financial transactions obtained by the government. These include all the income and expenditures. This accounting maintains control over all resources along with compartmentalizing activities in several funds to clear the usage of resources. It is used by government bodies that are state, country, federal, municipal and more. These accountants are closely observed and sometimes are responsible for keeping confidential information.
- Forensic Accounting
This type of accounting uses auditing, accounting, and investigating skills to examine the finances of a business or an individual. In other words, it is a branch of accounting that works to collect, recover, and reconstruct financial data when it is impossible to get them. This accounting type is applied when there is business fraud, fraud with taxes, security fraud, money laundering, and more. It uses techniques to investigate fraud matters and requires deep checking of the accounting matters of an organization.
Now you are aware of the types, let’s move further to know some of the basic terms used in this language:
Here are some of the words that are common in this language:
- Accounts Receivable
These are referred to as trade receivables. It is the amount or sum of money owed by the customers to a business after the delivery of goods or services. It is marked as an asset by the accountants in a company.
- Accounts Payable
These are termed trade payables. It is the sum or amount of money that a company owes to its creditors or suppliers in return for some goods or services delivered. These are marks as liabilities by the accountants of a business.
There are two types of assets: current assets, that will be converted into cash or its equivalent in a year. These include cash, accounts receivable and inventory. Second, fixed assets that are long-term and will benefit the company for more than a year. These include land, machinery, and real estate.
It occurs when a business or an individual owes money to someone else. One common example of liabilities can be a loan taken from a bank.
- Balance Sheet
It is a financial report that briefs the assets of a company. It includes what it owns along with the liabilities that it owes. In addition, it consists of shareholders or the owner at a particular time.
It is an asset or a resource a business uses to generate revenue. In other words, it is the level of owners’ investment in that business. The working capital can be calculated by subtracting current assets from current liabilities.
- Cash Flow
Cash flow is the balance of cash that moves in and out of a particular company at a specific time. In other words, it is the revenue expected to be generated through activities such as sales and manufacturing over a specific time.
- Cost of Goods Sold
It is defined as the total cost that a company spends on producing the goods sold or service provided. The cost of products falls into three types, materials, overhead, and labour. With services, these costs are divided into materials, equipment, and employee compensation.
It is an accounting entry that functions to either increase assets or decrease the liabilities of a company.
It is an accounting entry that functions to either increase liabilities or decrease the assets of a company.
These are the fixed, variable or day-to-day costs that a business obtains through its activities or operations. These are:
- Fixed: payments are regular, rent that will happen at a scheduled time.
- Variable: expenses that can change like, labour cost over a while.
- Accrued: expenses that are not paid yet.
- Operations: indirect expenditure associated with the production in a business.
- General Ledger
It is the complete record of all the financial activities or transactions over the life of a company.
- Trial Balance
It is a document that combines all the ledgers into debit and credit columns to ensure the bookkeeping of a company is correct in terms of mathematics. In other words, it is a report that balances all the ledger accounts at a particular time.
It was all about accounting. This article has enough information you need to perceive before starting to work with this. Till now, you have learned the definition, types, and basic terminology. So what is stopping you to get started? Just grab a pen and paper and work. If you have trouble understanding anything, you can seek accounting assignment help from experts in this field.