What are the different types of accounting?
Different types of accounting are –
Financial Accounting – This type of accounting records information related to the financial status of the company.
Administrative Accounting – Administrative accounting is focused on the administrative aspects of the company and is used above all to assess the fulfillment of the established objectives and improve the implemented strategy. It is very useful for making forecasts and planning the actions and resources to be used.
Tax Accounting -Tax accounting helps to register and prepare reports related to tax returns to the public treasury and payment of taxes.
Cost Accounting – This type of accounting is more focused on companies of an industrial nature. It helps to make a detailed analysis of the unit costs of production, sales, and, in general, of the production process that the company carries out.
Management Accounting – Management accounting has a broader vision than cost accounting since it records all the economic and financial information of the company to be able to make short-term and long-term decisions.
How do you maintain accounting accuracy?
Maintaining the accuracy of an organization’s accounting is an important activity as it can result in a huge loss. There are various tools and resources which can be used to limit the potential for errors to creep in and address them quickly if any errors do arise. My favorite is MS Excel.
Since you mentioned that MS Excel is your favorite, please give us three cases where Excel will make your life easier.
Various reports can be extracted from the Software. However, reports in specific formats are often required and this may not be possible in the Software. This is where Excel appears. Data can be sorted, filtered, redundant data fields can be removed, and data can be presented in a custom format.
Excel is also required to link multiple data sets. Therefore, different reports can be extracted from the software, and then, using the search function, they can be grouped into one report.
The use of Excel becomes the most important for doing various reconciliations. This cannot be done in software. For example, if I need to reconcile the vendor ledger balance, I will pull the ledger from the software into Excel and get a similar vendor Excel for your ledger. All reconciliations will have to be done only in Excel.
Is it possible for a company to show positive cash flows and still be in grave trouble?
Yes, if it shows an unsustainable improvement in working capital and involves a lack of revenue going forward in the pipeline.
What is the difference between inactive and dormant accounts?
Inactive accounts are which are closed and will not be used in the future. Dormant accounts are not currently functional but may be used in the future.