The importance of accounting

The term accounting refers to the systematic and timely recording of all changes in value in a Athenasia company.  Changes in value can be financial transactions such as creating and paying an invoice.  Abstract processes also count among the issues to be mapped, such as the depreciation of systems due to wear and tear.  The technical term for the changes in value to be recorded in accounting is “business transaction”.

The bookkeeping must follow certain commercial and tax law rules.  In any case, the principles of proper bookkeeping, abbreviated GoB, must be observed.  Larger companies do their accounting with the help of modern software and storage media or cloud-based.  The principles of proper IT-based accounting systems  also apply to them.

 Purpose of accounting

The posting of all business transactions in a delimited period forms the basis for the preparation of the annual financial statements.  This accounting system under commercial law consists of a balance sheet, profit and loss account and the explanatory appendix.

The economic success of a corporate maintenance hong kong is determined in the profit and loss account.  It compares the income and expenses incurred in a financial year.  The income mainly includes sales.  The expenses result primarily from the factors personnel and material expenses, which are necessary for the preparation of the operational services.  The balance sheet provides information about the origin of the capital liabilities sideand its use assets side.

The entrepreneur uses the annual financial statements to find out about the economic and financial situation.  The profit or loss shows him how successful the company has been in the past period.  External addressees, especially banks and other creditors, can also find important information in the annual financial statements.