About Accounting and Why Is It Important

Direct Knowlege Contributor Taylor Bauer
  • By Taylor Bauer, Technical Writer & Digital Marketing Expert
  • Taylor is a writer and SEO manager with a B.S. in Political Communication from Illinois State University. He also received his M.S. in Communications from Illinois State. His background comes from journalism, working at an NPR member station for three years before transitioning to blogging and search engine marketing. He lives in Illinois with his wife and two Toy Australian Sheppards.

About Accounting

One of the most vital elements of an organization is managing finances. Everything from costs to revenue impact what a business is capable of doing to expand and grow. Not every position in a company’s management team worries about math; a unique place in the company exists to help balance books and pay taxes. These skills are essential to keeping a business running and growing. That’s why anyone who studies to be an accountant finds a job quickly. Let’s explore the types of accounting through articles on specific skills and principles necessary for the position.

Accounting is the position in a business that handles all financial management and budgeting. Bookkeeping practices like organizing and filing receipts and documents is an essential element of this position. Other vital principles and skills for an accounting professional include mastery of tax codes, filing processes, and different types of economic competence. The role is essential at every business, whether they are a small business or major corporation. 

There’s a reason many accountants make good money. The skills and principles related to accounting require highly technical types of expertise. Let’s explore what this profession does in-depth and review different accounting resources like books, articles, and more.

Main Topics for Accounting

Accounting, also known as accountancy or financial reporting, is the management of financial information for types of entities like businesses and corporations. This role includes measuring, calculating, and communicating financial and non-financial information to keep track of how the organization is doing economically. The organization itself uses this information to optimize performance, but other entities use the data as well. If the organization has investors, creditors, or other customers, they likely want to know how it’s doing financially. In this category of Direct Knowledge, you’ll find accounting articles with more details about what accountants do, how they do it, and how you can join their ranks.

While there is a great deal of overlap in many accounting fields, there are also several specialties and specific skills. Other accounting articles in this category cover more of the topics in greater detail, but here’s an introduction to some of the most prominent areas:

Auditing

An audit is a process of verifying the claims made by a company or organization about their financial statements. The end goal of the review is to determine if the allegations are right in an unbiased manner. If an auditor believes the claims are not genuine or that certain accounting principles have not undergone adequate review, they must identify why they drew that conclusion.

Information Systems

An organization with a lot of data to process for accounting will have a system dedicated to it. Modern systems use advanced technology, often applying artificial intelligence and machine learning. The basis for the systems is statistics and modeling that can identify metrics of interest.

Financial Accounting

This branch is perhaps the most common, or at least well-known type of accounting. Thus, you can find an accounting article devoted to this topic here. Financial accounting looks at the financial information of an organization, reporting it to those who use the information. The reports cover financial data from past data. Investors and creditors then use this information to evaluate their past performance and determine what they will do in the future.

Management Accounting

Instead of completing a report on past data, management accountants measure and analyze data as it comes out. They use this data to perform a cost-benefit analysis, and don’t worry so much about formal accounting principles. The result is a report or budget for the future than helps managers make decisions and steer the organization in the right direction.

Tax Accounting

The set of tax principles used in other areas is the GAAP, or “generally accepted accounting principles. “ But in the US tax system, a different set of specialized accounting principles applies. These deal with tax differences between different types of businesses, as well as the difference between companies and individuals.

Forensic Accounting

While it might sound like something found on a crime scene, forensic accounting is just what takes place during types of professional disputes and litigation. Forensic accountants must work to a standard that they can present in a court of law for the proceedings of these events.

Accounting and Information About Facilitation Organizations

In addition to providing you with direct information, the accounting articles in this category also guide you to other useful tools and sources. Some of these lessons come in the form of journals and further reading material. Additional information might come from professional organizations. These organizations have their publications and might be something you’re interested in joining for other member benefits. The following is a helpful description of the involvement of these organizations in the field.

Accounting Firms

These firms specialize in providing accounting skills to clients. This sector can include handling payrolls, taxes, accounts, and auditing. The specialization in services provides optimal efficiency where it is needed most. If large enough, some companies must legally get qualified auditors to audit their financial statements. Companies usually opt for accounting firms due to their reliability and types of services.

Professional Bodies

Professional bodies in accounting often provide education and training for those in the field. They can help accountants gain official certification by training them as well as administering the designation. There are hundreds of professional accounting bodies in the world, with each country having its own (and sometimes multiple).

Standard-Setters and Other Accounting Articles of Interest

Specific standards, such as the GAAP or other international standards, are issued by official regulatory bodies. These bodies set standards for audits, ethics, education, and public accounting to ensure everyone follows the same general rules.

You can find accounting articles in this category that feature events and advancements involving these organizations. Keep an eye out for their involvement in the field and how it could affect you.

Accounting and Info for Careers

Before getting into a career in the field itself, you’ll need at least a bachelor’s degree in accounting or related fields. Math can be an excellent general foundation to build off of, or perhaps something similar to business management. Some employers might even require a master’s degree, but it likely isn’t necessary. Following a degree, certification, and professional qualifications prepare you to take the next step. Some classifications of accountants need an annual renewal of training and certifications to maintain their position and title. The type of accreditation and frequency with which you must complete them depends on your region and country.

Successful Careers

As found in data from the Bureau of Labor Statistics, a majority of professional accountants and auditors generally make a median pay of 70,000 dollars per year. The quantity of jobs in the field is also growing pretty quickly, so there should be plenty of opportunities to make a successful career. As an accountant, you’ll typically work a regular nine-to-five job in an office. While most work full time, it’s not uncommon to work more than full time as overtime hours are the norm at certain times of the year that correspond to financial and economic seasons. Check out some accounting articles with examples of exciting professionals and their careers here.

If you want to practice accounting, it’s best to look for articles that help you gain actual skills. These skills will focus on the use of math or computer programs to get tasks done. In addition to accounting, articles, books, and courses in the area could be of great help as well.

Accounting Books

Dual-entry bookkeeping, financial statements, managerial accounting, fraud, analytics: there are endless areas in which to study and improve when it comes to accounting. Direct Knowledge provides books to help you delve into unfamiliar territory or perfect skills you already possess. Written by professionals in the subjects, you can find accounting books that provide clear explanations and thorough practice in applied skills so that you can reach new heights in your academic or professional career.

Accounting Books Business women using computer and calculator during note some data on notepad for calculate financial at home office.jpeg

Accounting Books That Give a Helping Hand

Accounting consists of meticulous record-keeping of money and finance, forming a crucial part of any business. Professional accountants will have formal education and state certification, but those are just the final steps to a long process. First comes a formal education from a university, taking years to complete. But anyone can start gaining the skills to become an accountant at any time. For example, just getting familiar with spreadsheets in Excel or other software is an invaluable skill.

For Those Just Starting Off

Reading books on accounting can also introduce you to key concepts in the field. And that’s where we come in. Books such as Financial Accounting are a great place to start. This text begins with fundamental concepts for beginners studying in their undergraduate or even master’s programs. It uses plain language to make hard concepts like equity, liabilities, and assets easier to grasp. It also teaches the basics so that students come away with a good grasp of the career field.

Advancing in the Field

As you become more familiar with the subject, more advanced accounting books may be a better fit. You can use beginner books as an introduction to the many niches in the issue, and then find more advanced books that suite your preferences. And for those who still desire to explore more about a niche or need more practice with the fundamentals, books like Principles of Financial Accounting can help ease you into new areas. It still goes over basics but also branches into higher-level material for intermediate learners and even experienced professionals looking to learn something new.

These accounting books provide you with the tools you need at any step of the process of learning about accounting. Even if you don’t believe you want to pursue becoming an accountant, maybe you just want to learn about the subject because you’re about to start a business of your own. Understanding the ins and outs of the jobs that your workers will be doing can help you make their jobs easier and get better results. On the other hand, maybe you do want to become an accountant or are just starting to consider it. You can find accounting books on the basics, perfect for younger learners, supplementing university material, or for those changing fields of work.

The Variations of Accounting

Essential subjects in accounting include cost analysis, taxes, finance, and management. Bookkeeping can also be valuable in the field, and sometimes even presents itself as a synonym. But in reality, accountants typically work together with bookkeepers who keep records of sales and transactions to make sure everything is in writing. Then, the accountant looks at financial statements and does audits to make sure all is correct.

Because accountants have roles in all businesses, the field is full of chances for advancing in many ways. Accountants can live practically anywhere, and work in almost any type of business. Even personal finances can benefit from some quality accounting. You could hire a bookkeeper to do it for you, or you could learn the basics here. The accounting books in this category can walk you through every step of the way.

Whatever stage you might be in, there’s an accounting book that can help raise you to the next one. And our range of eBooks is just a click away for anyone around the world. The final step for you to do is pick a place to start, and jump right in.

Accounting FAQ

If you want to develop skills in accounting yourself, then begin your study with these topical questions and inquiries on the subject.

What are the essential accounting skills?

Necessary accounting skills require professionals to balance a budget, keep organized documentation of all financial transactions, and more. The role of an accountant is to organize and manage the finances of a person or business. This responsibility requires knowledge of essential money management, like debts and revenue. Accounting professionals must also know how to predict market changes.

What are the five basic accounting principles?

Five basic principles define the role of an accountant. The Revenue Recognition Principle involves managing money made by a company. Predicting the cost of something is known as the Historical Cost Principle. Balancing expenses with income is known as the Matching Principle. A Full Disclosure Principle requires visibility in financial transactions. Lastly, the Objectivity Principle promises no bias in economic tasks or duties.

What are debit and credit?

Debit and credit help individuals and companies function and manage cash flow. A debit is the process of transactions involving cash or money currently owned by a person or company. Credit is a transaction in which a debtor promises to pay the creditor back at a later date. Both play vital roles in personal and business finances.

What is General Accounting?

General accounting is the practice of balancing a budget and managing expenses. Revenue also plays a vital role in managing the money coming in and what is going out. Skills in general accounting apply to specialized branches of the subject, including personal and business financial positions—companies big and small desire these skills.

Conclusion

Across all different types of accounting, professionals fluent in financial practices help businesses stay open. The role of an accountant changes slightly with new updates to technology and law but otherwise remains unchanged. Whether a professional works for a single company or freelance for various organizations, the profession usually yields adequate job security and pay.

Several people in the world hold positions of power yet do not understand accounting. These skills are vital to all aspects of a business. Large companies and small hometown businesses both need bookkeepers to allow for sustainable business practices. If a company does well, then accountants also help to plan for the future and create room for expansion. Accounting skills and principles are a great study to adopt if you enjoy math or economics.

You can learn all about this subject and more on Direct Knowledge. The articles, book reviews, and courses on the website help people like you pick up new skills or find new career paths. There are several resources online, but we strive to place all essential information in one place. Don’t use as much time trying to find information and spend more time working on your skills and expertise. Use Direct Knowledge for free today to learn a little bit more than you knew yesterday.

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