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By deepak kulkarni
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Sound familiar? Maybe you're one of the entrepreneurs who share these thoughts. Welcome. I'm not out to convert you to the good of accounting. However, my guess is that once you see how to set up an efficient system for your small business one that really does contribute to overall profitability-you'll convert yourself.
The same concept of a sheet of paper holds for each sub ledger that feeds the general ledger. A computerized system works the same way, except that the general ledger and sub ledgers are computer files instead of sheets of paper. Entries are posted to each and summarized, and then the summary is sent up to the G/L for posting.
You use an income statement to track revenues and expenses so that you can determine the operating performance of your business over a period of time. Small business owners use these statements to find out what areas of their business are over budget or under budget. Specific items that are causing unexpected expenditures can be pinpointed, such as phone, fax, mail, or supply expenses. Income statements can also track dramatic increases in product returns or cost of goods sold as a percentage
of sales. They also can be used to determine income tax liability.
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A current asset is any assets that can be easily converted into cash within one calendar year. Examples of current assets would be checking or money market accounts, accounts receivable, and notes receivable that are due within one year’s time.
Accountants complete many tasks besides preparing financial statements and recording business transactions. They also calculate computing costs and efficiency gains for new technologies, participate in the set up for acquisitions and mergers, and develop IT systems to track financial performance, tax strategy, and employee benefits management.
Some graduates of junior colleges or business or correspondence schools, as well as bookkeepers and clerks who meet the education and experience requirements set by their employers, can obtain junior positions and advance to accountant positions by demonstrating their skills on the job. Most beginning accountants and auditors may work under supervision or closely with an experienced accountant or auditor before gaining more independence and responsibility.
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