Introduction and what is Accounting Basics?

Accounting can be defined as the utilization of a system of formulas, terms & other record keeping devices which enables business persons to trace, compare and calculate their growth in the financial industry, or in a few cases recession. The general accounting concept, the equations in accounting, comprises calculating and recording assets of a particular business company, equity as well as liabilities. In this way, financial position of any business could be understood and assessed in a quick & easy manner. Other concepts which are more in-depth in the accounting industry include handling payroll, auditing, and investments for the companies.

Accounting is one important discipline in education

It’s taught in majority of the universities & colleges & even in a few of technical schools as well as high school classes. At the moment, there are numerous levels of specialties, degrees and govt. needed licenses which anyone can, or should, acquire in the accounting discipline. For centuries, accounting has been practiced & taught as a major discipline & it still continues to develop as researchers and practitioners in the accounting field encounter constantly changing business, legal and financial issues. Depending upon how an individual likes to be involved in accounting, he/she must get some type of training in the accounting arena. Accounting for big industries, for instance it might need whole teams or departments of expert accountants.
what is accounting basics
Conversely, somebody who just wants to keep track of his/her part time business finances will be able to manage accounting using a general knowledge of accounting formulas and concepts.
Accounting - An essential component of any commercial success
Accounting offers business administrators a method for evaluating the financial position of their company or business. With the help of this financial data, administrators can match the economic status of their firm to previous economic years or periods, set genuine aims for future fiscal years or periods as well as make decisions which depend upon or have an effect onto the capitals of their business.

In addition, accounting reports notify the employee of the firm, shareholders & the  public user regarding the financial standing of the company. Literally, by law, all the businesses are needed to file some type of accounting information to IRS or/and other financial & govt. entities. Auditing, whether external or internal, is a crucial function of company. Having efficient & sound accounting practices can make sure a positive audit.

See Also:

Sum Years Digit Calculator

Sum years digit is an accelerated depreciation where in you are adding all the digit of the life of an asset. To further understand this lets take an example. If an asset is expected life of 4 years, then  SYD = 4+3+2+1 = 10. So getting the 1st year depreciation is by simply multiplying the depreciable base which is equal to the cost less the salvage value of the asset. Below is the simple tool where in you can easily calculate your SYD cost.

Year 1 = 4/10  * Depreciable Base
Year 2 = 3/10  * Depreciable Base
Year 3 = 2/10  * Depreciable Base
Year 4 = 1/10  * Depreciable Base

See also: Straight Line Depreciation Calculator , Double Declining Depreciation Calculator

Double Declining Depreciation Online Calculator

Double declining method is also known as the 200% declining depreciation balance. It is an accelerated depreciation of asset where in depreciation is much greater on the early year of the asset and later years is lesser. Depreciation under this method may represent the following formula:
Straight line depreciation percent * 2 [(Book Value of asset beginning period – Salvage Value) – Accumulated Depreciation)]. Below is a simple tool on how you will calculate your double declining depreciation.

See also: Straight Line Depreciation Calculator , Sum Years Digit Calculator

Straight Line Depreciation Calculator

Straight line depreciation is a method where in cost of the asset minus the expected salvage value of an asset divided the number years expected for the asset to be used for a certain period of time. Under this method of depreciation the allocated cost is equally distributed. Straight line method is the most simple and easy approach in computing the depreciation of an asset. Below is the simple tool in computing your straight line method.

See also: Double Declining Method Calculator , Sum Years Digit Depreciation Calculator

Inventory Turnover Ratio Online Calculator

Inventory turnover refer to the ratio of the Cost of goods sold divided by the average of the inventory for the period of time. Inventory Turnover ratio measure the efficiency of the business on how company handle its merchandise carefully. It said that a higher inventory turnover means a good handling of company merchandise while lower value of inventory ratio represents the over stocking and it may result to the increase of inventory holding cost. Below is the simple tool on how you can compute your inventory turnover ratio.

Related Post