Careers in Accounting Essay Example | Topics and Well Written Essays - 2000 words

Careers in Accounting - Essay Example Income Tax Act and the Companies Act have laid down certain requirements on business organizations to put forward annual financial statements. These financial statements have to be prepared as per GAAP standards. The recording of accounts of a business using the double entry system of book keeping is done in a general ledger, which is also known as the nominal ledger. This is the principal book of entry and it includes accounts for items like current assets, fixed assets, liabilities, revenue and expense items, gains and losses. Collected group of accounts supporting the items displayed in the main financial statement is shown in the general ledger. The transactions are recorded in the general ledger directly from the sales daybook, purchases daybook, cash book and general journals daybook. This ledger is generally supported by one or more subsidiary ledgers which give the details of the accounts posted. For instance an accounts receivable subsidiary ledger would give the information for every credit customer so that the balance in the customer's accounts can be easily tracked. The subsidiary ledger is then totaled and compared with the controlling account which is the accounts receivable in this case. This ensures accuracy and it is a part of the process of preparing a trial balance. (Professor Cram, 2008). The general ledger helps in deriving the balance sheet and ... Each and every account in the general ledger may consist of one or more than one pages. Posting in general terms is the process of recording the credits and the debits in the general ledger. Also a column will display the running activity total (Professor Cram, 2008). Example of a general ledger entry: The above is the 'T' form of a general ledger. What is a Sales Ledger A salesledger incorporates the personal accounts of clients who have some sort of sales made on credit by the business. They are known as debtors. A sales ledger records information with regard to invoices issued, credit notes issued and payments received. As customers is the life-blood of any business it becomes a necessity for a business to main a sales ledger efficiently and accurately. What is a Purchase ledger A purchase ledger of any business contains the personal accounts of suppliers from whom the business has purchased on credit. Information with regard to invoices received, credit notes received and payments sent are recorded in this book. A purchase ledger invariably records all purchases made by a business. It supervises: The outgoings of a business. The amount owed to others by a business at any one time Theoretical need for these skills: Financial statements offer a synopsis of the financial condition of any business at any given time both in short and long term. All the related financial information of a business which is presented in a prepared manner and in a form easy to comprehend is known as the financial statements. The four basic financial statements are: 1. Balance sheet: shows the financial position or condition and reports on a company's assets, liabilities, and net equity at any given point of time. 2. Income statement: is the Profit and