General Accounting Skills
General accounting includes basic skills such as balancing a financial report sheet. There are four basic types of accounting reports required for general accounting. Anybody preparing an accounting report must have knowledge of accounting principles and laws. Government organizations list accounting principles and regulate the reporting of finances.
Other People Are Reading
-
Types
-
Types of basic accounting skills include the ability to enter financial data into a balance sheet and to balance the sheet on a daily, weekly, monthly or quarterly basis. The preparation of tax documents and other financial statements is also necessary for basic accounting. People who perform basic accounting must become familiar with Generally Accepted Accounting Principles (GAAP) and comply with the laws that govern accounting. Basic accounting also includes the ability to project a budget and work with individuals and business managers to create financial plans and discuss investment opportunities.
Function
-
Accountants use financial statements to record and report financial data for individuals and organizations. The four basic types of financial statements are income statements, retained earning statements, balance sheets, and cash flow statements. Income statements balance revenues and expenses to show how the company gained or lost income over a specific time. A retained earning statement reports changes just in retained earnings over a specific time. A balance sheet shows the assets, liabilities, and stockholders' equity, which are the three main components of the basic accounting equation. A cash flow statement provides information regarding the movement of cash within the company.
-
Features
-
Basic accounting requires the entering of financial data into a balance sheet. One side of the balance sheet represents debits and the other credits. Accounts are considered balanced when both sides of the sheet have the same total. Accounts achieve balance when each type of entry takes or adds an equal amount from each side of the balance sheet. For example, assets increase the debit column and decrease the credit column by the dollar amount of the asset. Liabilities decrease debit and increase credit.
Considerations
-
All business and individually reported accounting must comply with the law and with GAAP standards. GAAP is a recognized set of standards and rules that are accepted as a general guide for financial reporting. The 'generally accepted' part means that the standards have substantial authoritative support. Support for the GAAP is provided by the Financial Accounting Standards Board (FASB) and the Securities and Exchange Commission (SEC). The FASB has been responsible for the development of U.S. business accounting standards since the early 1970s.
Expert Insight
-
The FASB defines the objectives of financial reporting. Objectives include use in investment and credit decisions, future cash flow assessments, and the identification of resources, such as assets, and claims, such as liabilities. The FASB's conceptual framework quantifies the characteristics of accounting information. The FASB describes accounting information as relevant, reliable, comparable and consistent. The FASB's conceptual framework lists the elements of financial statements. The main elements are assets, liabilities, equity, revenue and expenses.
-
References
Resources
- Photo Credit juggling the figures. image by Aussiebloke from Fotolia.com
