Intermediate accounting for plant, equipment, and property: Intermediate accounting takes place when an organization must account for an involuntary conversion, like the sale of plant and machinery. If this occurs, an organization must record the difference between the actual cash outlay and the book value of the asset as profit or loss due to disposal of asset during the course of a period. Because the asset was purchased from an external source and not through the inventory process of inventory recording, the book value is usually determined by selling the assets rather than by keeping the asset at the location of the purchase.
Inventory and finance: For most businesses, the inventory process is the most important because it provides information about the value of assets. This information can be used in determining the purchase cost of assets, the sales price, and the tax basis of assets. A business must also consider the future financial results of purchasing an asset and determine if the purchase will provide a return on investment. For businesses that generate a large portion of their revenue from their assets, inventory and finance are very important components of the bookkeeping process.
Financial statement: The financial statement is basically a statement of income, balance sheet, statement of cash flows, statement of earnings, and statement of stockholders’ equity. The financial statement will include a statement of income, which details the activities for the period covered by the financial statement. The balance sheet shows the company’s cash and accounts receivable. The statement of cash flows details the changes in the cash flow for the period covered by the financial statement.
Statements of Stockholders’ Equity: The balance sheet and statement of cash flow to cover the company’s outstanding equity and related assets and liabilities. It is the responsibility of a senior accountant to ensure that all equity holders’ equity is accounted for. The financial statements provide detailed information to the management regarding the net assets and net equity, the cost of the company, and its operations.
Manual bookkeeping: Bookkeeping is a manual bookkeeping system. The bookkeeper prepares and submits the accounting records, usually monthly or weekly, for review by a group of accounting professionals. The bookkeeper maintains the day-to-day bookkeeping records of accounts payable, receivable and inventories, as well as the balance sheet. The bookkeeper also prepares, submits, and verifies financial statements, maintains the records of accounts payable, and makes reports and certifies financial transactions.
The bookkeeping professional uses the accounting records to create the balance sheet of the business and provides information on the assets of the business, its liabilities and its net worth. It includes all transactions relating to the organization. It should include: total assets, total liabilities, and net equity, with an addition or subtraction of surplus cash flow, accounts receivable, accounts payable, and inventories.
Bookkeeping can be described as the art and science of preparing the financial records of an organization. It involves the organization’s financial transactions that involve the use of cash and its values. The use of the bookkeeping records should be limited to the requirements of the organization. There are three basic bookkeeping procedures: standard, ledger, and electronic. A bookkeeping practice must be followed according to the specific requirements of the organization.