Complete understanding of accounting with its benefits
Although for many people the science of accounting is considered a simple calculation system, in fact, accounting itself acts as a process that is not simple. That is why the meaning of accounting is quite complex and has many definitions.
Meanwhile, this knowledge is widely used in daily applications, especially related to business activities. With accounting knowledge, entrepreneurs can monitor their business, whether it is running well or not.
Especially, in terms of recording accounting financial reports. The flow of transactions or cash inflow in a company really requires the role of accounting knowledge. This is also what makes many parties use accounting software and applications as tools to make their work easier.
To discuss further regarding what accounting itself is, see the discussion below.
Get to know the definition or meaning of accounting
As mentioned previously, accounting is not just a system of calculations but is quite a complex field of science.
The definition of accounting is a process that begins with the activities of recording, grouping, managing, presenting data and recording transactions related to finances in a company. The information taken is used by an accountant who is an expert in the field to make decisions.
Not only that, another definition of accounting is known as business language which plays a role in measuring the results of economic activities in an organization or company along with conveying information to certain parties. These parties include management, creditors, investors and regulators.
The importance of accounting in a company has made certain parties successful in developing theories related to the world of accounting. This makes it possible to achieve maximum ease in carrying out activities. One of them is through accounting software which is considered quite helpful.
However, in practice, as an entrepreneur or someone with a professional accounting profession, you must still know basic accounting knowledge which is managed manually.
The broad understanding of accounting also extends to other areas of accounting. Namely, there is financial accounting and also management accounting. Where, the field of accounting that is related to the examination of financial reports is referred to as financial accounting which is tasked with managing company transactions and at the end of the period will produce output in the form of financial reports.
Meanwhile, the meaning of management accounting is in the field which aims to produce financial information targeted at the management or managers of a company.
In another sense, management accounting also has a definition as a field of accounting whose output is intended for internal parties in the company.
Understanding Accounting According to Experts
Many experts have different fields of knowledge so that the definition or meaning of accounting is also different. You can see these differences from the various definitions of accounting according to the following experts.
1. Suparwoto
Suparwoto stated that accounting is a system or technique for measuring and managing financial transactions and providing management results carried out through the form of information to internal and external parties of a company. The external parties referred to by Suparwoto are government creditors, investors, labor unions, and so on.
2. Soemarsono
Not much different from Suparwoto, Soemarsono stated that the definition of accounting is a process of identifying, measuring and reporting economic information which aims to enable clear, firm assessments and decisions for those who need this information.
3. Sofyan Harahap
According to Sofyan Harahap, the definition of accounting is the process of identifying, measuring houses and conveying economic information as a material in considering various alternatives to draw conclusions by users.
4. Sunyanto
Sunyanto defines accounting as a process stage in collecting, identifying, recording, classifying, summarizing, and presenting or reporting a financial transaction and interpreting the results for the purpose of decision making.
Purpose of Accounting for Parties in Need
Apart from knowing the meaning of accounting, you will also know the purpose of accounting itself. Based on the discussion above, regarding the meaning or definition of accounting itself, it can also be seen that accounting has the main objective as a process for producing or presenting information about the economic world of an economic entity to corporate parties or interested parties.
This goal plays a very important role in a company. The reason is, through economic information which is related to financial information, controlling within a company can be managed well. Apart from that, the progress or development of a company or organization can also be known periodically through economic information from accounting science. That is why, accountants have an important role in a company, especially to achieve the goals of accounting itself.
Benefits of Accounting for Stakeholders
The meaning of accounting is known to be quite complex, this is no different from its benefits which are also increasingly expanding widely. The reason is, there are not just one or two benefits resulting from accounting, but quite a lot and breadth.
The use of accounting information is generally used by creditors, governments, investors, managers, employees and company leaders. Relevant information is useful for them because it can be used as a basis for decision making and also as proof of the responsibility of company management to its leaders.
Not only that, accounting is also used as a material for knowing company developments from year to year. So, based on the related explanation, accounting also has the benefit of being an intermediary for obtaining financial information in a company, proof of accountability, management or administration to owners, and also functions as a source for knowing the progress that has been made by a related company.
Accounting Function
Apart from knowing the meaning of accounting, its objectives and benefits, you also need to know several accounting functions as follows.
1. Report Recording
The function of accounting itself is to maintain a record of reports by recording or recording transactions carried out systematically and chronologically.
2. Protect and Maintain Property
If seen from the definition of accounting, then the field of accounting also has a function as a medium for calculating the reality of an asset arrangement by a company as its real owner. This can ensure that the property is well protected and maintained.
3. Classification and Summarizing
Another function of accounting is classification related to analysis carried out systematically through recorded company data.
Apart from that, it also functions as a presenter of confidential data in a way that is understandable and of course useful internally and externally to the company regarding the accounting report itself. Where, this process focuses more on reporting the trial balance, up to the profit and loss report.
4. Legal Meetings
If you pay attention to the meaning of accounting, then indirectly you will also know other functions of accounting as a legal meeting. Where, the purpose of the legal meeting itself is to design and develop systems such as maintaining records and reporting results which in the future will legally fulfill legal requirements.
CLOSING
IThis is a complete discussion regarding the world of accounting, starting from the meaning of accounting, its objectives, benefits and functions. Don't forget to visit our main offer page to get other interesting information you need.
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