There Are Some Functions Of Accounting That You Must Know

In accordance with the understanding of accounting, it is known that accounting pertains to the financial reporting system, especially related to the company’s profit and loss. It’s because accounting has a very large function in a business. You might ask a trusted Online bookkeeper and accountant about this if you feel uncertain about it Online bookkeeper.

Well, here are some functions of accounting:

Recording Report

The first function is to record transaction records systematically and also chronologically. This one function is the most important function of accounting. The purpose of this listing is to find out whether the company receives profit or loss from the business it runs.

Protecting Assets and Property

Furthermore, the accounting function is to calculate how much depreciation of assets in a company. If the calculation is wrong, it can lead to a business through bankruptcy. Therefore accounting is designed to protect various properties and assets in the business.

Legal Meeting

Did you know that the accounting function is also related to the design and development of the accounting system? For example, this accounting system seeks to ensure that records and reporting of results meet legal requirements.

Classification

Furthermore, the accounting function that is no less important than that mentioned earlier is a classification or grouping associated with a systematic analysis system of all recorded data. With the grouping or classification, it will certainly make it easier to check the type of transaction or entry.

Communicating Results

Furthermore, the accounting function that is no less important is to communicate the results and transactions that have been recorded to all parties concerned with certain businesses. The intent of these related parties such as investors, creditors, employees, government offices and many more.

Make a summary

It is well known that summarizing activities always require the presence of confidential data with easy to understand delivery. Besides this summary is also useful for internal parties and also external to the end-user of the accounting report made.

Analysis and Interpreting

The last accounting function is used as an analysis and also to interpret business or company financial data. Financial data that has gone through the process of accounting analysis will be easier to understand so that it can help in making judgments related to the company’s financial condition.