What is meant by Accounting?
The term "accounting" refers to the systematic and organized recording of all financial transactions of a company. It serves as the basis for preparing financial statements, tax returns, and management reports. Accounting is an essential part of a company's financial management and ensures that all business transactions are accurately recorded and documented.
Typical software functions in the area of "accounting":
- Recording Transactions: Automated entry and booking of revenues, expenses, and other transactions.
- Account Management: Management of general ledger and sub-ledger accounts, including accounts receivable and accounts payable.
- Automated Report Generation: Creation of balance sheets, income statements, and other financial reports.
- Tax Calculation and Filing: Automatic calculation of taxes, such as VAT, and preparation of corresponding tax returns.
- Cash Book Management: Management and documentation of all cash transactions and cash balances.
- Bank Integration: Automatic import of bank transactions and reconciliation with system entries.
- Archiving and Auditability: Ensuring legally compliant archiving of financial documents and supporting audits through comprehensive documentation.
Examples of "accounting":
- Double-entry Accounting: A system where each transaction is recorded on both the debit and credit side of an account.
- Income and Expense Statement: A simplified accounting method where income is compared to expenses.
- Cash Book: Documentation of cash transactions in a business.
- Fixed Asset Accounting: Directory and management of fixed assets such as machinery, buildings, or vehicles.
- Travel Expense Report: Documentation and accounting of expenses related to business trips.
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