THE ACCOUNTING INDUSTRY has certain rules to be followed strictly, especially when starting a business.  Accounting professions assist business people by informing them about effective accounting techniques and procedures, or more commonly, simply completing the business’ accounting needs themselves.  This ensures that customers feel confident about services offered.  

There are various accounting rules that have been developed for accountants to apply.  While not all businesses utilize outside accountants (especially startups, as they probably can’t afford it), whoever is planning to keep track of the business’ books and complete their taxes needs to know the basics of accounting.  QuickBooks are one of the effective ways used to ensure business owners adhere to the rules of basic accounting.  Basic accounting rules are valuable material that is applied by accountants, globally.  Even though it is not mandatory for accountants to follow these rules, there are accountings laws that should be looked into, depending on which state your business is incorporated out of.  

Accounting rules can be used to handle problems caused by incorrect recording of expenses as well as income.  Revenue, profits, losses and investments should always be recorded at the same time.  This helps business owners to determine if the business is making losses or profits. As no one knows the date when a business will go under, one accounting principle is periodicity.  This is mainly because business may continue indefinitely.  Accountants can record exact data by adhering to the rule of periodicity.  By following these rules, accountants can easily acquire information about the financial status of businesses.  This is of great benefit since accountants and bookkeepers can easily identify an entity’s financial statement and make predictions based off of past trends.  Lately, organizations that stick to accounting rules are in high demand.  This is mainly because their records can be easily understood.  QuickBooks allow accountants to store their financial statements and, at the same time, adhere to accounting rules.

Bookkeeping systems are one of the more well-known accounting methods.  This method has been applied by different businesses for many years; this includes accrual as well as cash.  Most corporations apply accrual basis; this, however, depends on the business’ volume of sale, method of selling, and business structure.  The easiest way of keeping your financial information organized is by applying cash method.  This way, the actual amount of money flowing in and out of the business is recorded. From there, all incomes are documented once they are received and actual expenses are accounted for after they have been paid.  Cash method is one of the more basic accounting rules applied by accountants.  The accrual method allows accountants to record expenses as well as income when they occur.  Sale on credit is a good example.  Accountants around the world are required to apply the accrual method.  This method is suitable in case the annual sales are more than $5 million.