Accounting Training in Ahmedabad Archives

Posted on July 22, 2021May 27, 2024 by admin-s20

Role Of Technology In Accounting

Every modern-day activity that we can think of right now, is either directly or…

Every modern-day activity that we can think of right now, is either directly or indirectly dependent on technology. Starting from electric toothbrushes to Electric cars with autopilot mode, humans have made extensive use of technology in various fields.

Just like every other field, business is also one of the most important fields of all time and the language required to understand this important field is accounting. Technology also plays a huge role in accounting. Let’s learn more about this amazing connection.

What Is The Relationship Between Accounting And Technology?

Accounting is the language of business. It has been through many changes and modifications throughout the years. But, technology has always been a very important part of accounting and it makes the accountant’s job a little easier. Technology has helped increase the efficiency and ability of an accountant to assess statistical values.

It has also enhanced the ability of an accountant to interpret the language of businesses with such ease and that has made the accountant a corporation’s most trusted business advisor. One should consider an account taxation course in Ahmedabad to learn more about it.

What Is The Role And Impact Of Technology On The Accounting Process?

Accounting was once done by hand but now technology has made it possible and also very easy to record information in real-time, collect and compile information from various sources and also automate repetitive tasks.

This allows the professionals to focus more on other important tasks like giving financial advice and monitoring the performance. IT has also helped industries and companies reduce errors and make better financial decisions.

Technology has impacted the accounting field in more than one ways-

Accessibility Of Accounting Data Has Improved A Lot
With the use of technologies like cloud accounting services, any authorised user can access the information required from anywhere they have internet. This saves the time of an accountant physically downloading files and sharing it with other users.

These services can also be accessed from the mobile device of the user. This has improved the efficiency of the work done a lot.

Automated Data Entry
There are many popular accounting software nowadays that can integrate with invoicing, payment and payroll services as well as full enterprise systems. So that accounting records can be automatically be updated as transactions happen, this gives the software access to real-time information.

Altogether, these technologies reduce the need for manual entry and save the accountants crucial time that they can use for other tasks. This has brought changes to the role of an accountant today. Now, the accountant can spend more time analysing financial data and advising management.

Accounting Data Is More Accurate
The most obvious impact of technology in accounting is the reduction of errors. Accountants can now easily rectify the mistakes and also provide companies with more useful financial information.

Automation of the recording processes has reduced human errors to a huge level. It also checks for common errors and notifies the accountants instantly so they can address the issue without wasting any time.

Better Decision Making
Apart from various other features, technology also helps accountants search for numerous financial documents for all types of important information and even assess the impact of certain financial decisions. Account taxation course in Ahmedabad is the best choice to learn more.

What Are The 5 Roles Of Accounting?

Accounting serves the purpose of providing financial information to the stakeholders of the business: management, investors and creditors. The measure and summarization of the activities of the company are seen by the accounting department. After the evaluation, the results are communicated to the management or the specific party.

5 functions of Accounting are-

Forming A Plan And Controlling Financial Policy
Several financial information is proposed before the management so that they can control the financial policies and formulate plans concerning the future activities and course of action.

Preparing A Budget
An estimation of the income and expenditure is prepared based on future activities. This is also one of the most important roles of accounting. It also provides all the necessary information required for preparing this budget. Later on, carried out expenditures are compared with budgetary elements.

Cost Control
A standard cost is estimated ahead of every cost. The necessary information for estimation of the cost is available from the past accounting records. The actual cost and the standard one are compared for calculating the efficiency of work.

Evaluation Of Employees’ Performance
Information required for evaluating the assigned task of employees of every department is provided by the accounting department.

Prevention Of Mistakes And Deceit
The accounting system helps check the activities of the employees to prevent errors and fraud.

6 Reasons Why Tech Is Important For Your Accountancy Practice

The language of business needs to be updated with the technological advances so that they can respond to the market conditions and clients’ needs properly.

Digital resources and online tools have increased productivity a lot and also helps the organization. Electronic accounting has absolutely replaced manual accounting. It has not only reduced errors to a large extent but also saved a lot of time, increased accuracy and other advantages.

Therefore, the accounts should always be updated and aware of all the technological advances. You can learn more about it in the accounting training in Ahmedabad.

Out of all the numerous, here are 6 reasons why tech is important for accountancy practice –

Digitization Of Documents
Maintaining manual paper records is very costly and time-consuming task. Hardly anyone believes otherwise. Apart from that physical space is also an issue that needs to be considered.

Physical storage is being slowly replaced by digitized documents. Ease of access is one of the major factors to be considered. Anyone with proper authorization can easily gain access to them.
Elimination Of Bureaucracy
Online accounting systems are platforms that are simple and intuitive and provide direct channels to clients as well as conduits for various information, documents and other items that can be digitized.

This saves time and also eliminates layers of bureaucracy. These platforms also provide various online management tools that help reach goals and complete tasks.
Virtual Calendars And Task Management
The cornerstone of today’s running of the office is the online diary. Calendar management tools that help in setting alerts for meeting deadlines and avoiding fines are offered by various digital platforms.

These tools are easily accessible and useable even through mobile devices and any updates are shared immediately between the members.
Specific Tools For Accounting And Tax
The use of digital platforms that offer specific tools for accountants is a very important choice. A system that is fully compliant and updated regularly is what any accountant will want for better performance.

Along with all the basic features, if it offers any additional tools such as automation and reporting, the productivity is increased and so is the operational efficiency.
Regular Training
If the gains derived from technology are to be maximized, regular training of the employers is very essential. It is only through this training that accountants and other professionals will be able to deliver and fulfil the expectations of the management.

If the gains derived from technology are to be maximized, regular training of the employers is very essential. It is only through this training that accountants and other professionals will be able to deliver and fulfil the expectations of the management.

A trained professional will always be on the lookout for any sort of errors and thus avoid them. It also saves time for the business. technology comma inclusion of legal compliance and changes in legislation should be considered for the training. Accounting Training Course in Ahmedabad is something you could think about for a better understanding.
Connecting To Customers
Accounting professionals and customers have been brought closer with the help of technology. Communication is much easier and instant through many dedicated platforms that are present online nowadays.

It saves a lot of time for both the clients as well as the professionals and also increases efficiency. Technology also helps in easy tracking of customer services and helps in easy improvements, thus improving customer satisfaction.

Conclusion

What concerns accounting is mainly the quantitative expression of economic phenomena. The main functions of accounting are to measure the resources held by certain entities, to reflect the claims against and the interest in those entities, to measure the changes in those resources claims and interests, to assign the changes to a specific period, to express the preceding in terms of money as a common denominator.

Technology plays a huge role in modern-day accounting. Accountants keep themselves updated with the latest technological advances to improve their performance and efficiency. It is not just about flawless work or time management, it is also about many other factors such as customer satisfaction, meeting of deadlines, and proper utilization of physical space.

Posted on May 26, 2021May 27, 2024 by admin-s20

Accounting Concepts And Assumptions

Accounting is the process of recording financial transactions of a business. The accounting process…

Accounting is the process of recording financial transactions of a business.

The accounting process includes summarising, analysing, and reporting these transactions to oversight agencies, regulators, and tax collection entities.

Important Accounting Principles

Accounting Concepts refer to the basic assumptions, rules and principles which work as the basis of recording business transactions and preparing accounts.

The main objective of these concepts is to maintain uniformity and consistency in the accounting records. These concepts consisting of the very basis of accounting are as follows

Business/ Economic entity assumption: This concept assumes that for accounting purposes, the business enterprise and its owner are two separate entities. For example, when the owner invests money in the business, it is recorded as a liability of the business to the owner, similarly, when the owner takes away some business cash/goods for his personal use it is not treated as a business expense.

Thus the business entity concept states that any expenses incurred by the owner from the business for his personal needs will be considered as withdrawal and will be shown in the drawings. External stakeholders like; Government and investors use a company’s financial records to assess its performance. Hence the transactions must reflect the activities of the entity accurately

Money measurement concept: This concept assumes that all business transactions must be in terms of money, that is in the currency of a country. It is the reason why you have to complete your business bookkeeping for a foreign transaction in Home currency.

This concept helps in recording business transactions uniformly. While this concept guides the accountant on what to record and what not to record, here is a link to a certified account taxation course in Ahmedabad that is sure to guide all the CA aspirants or accounting professionals.

Going concern concept: It is also referred to as ‘the non-death principle’. This concept states that a business firm will continue to carry out its activities for an indefinite period. This concept helps in the preparation of financial statements also depreciation on a fixed asset is charged based on this concept. It helps the business judge it’s capacity to earn profits in future

Accounting period concept: As per the accounting period concept, all the transactions are recorded in the books of accounts for a specified period. Hence, goods purchased and sold during a period, rent, salaries etc paid for a period are accounted for and against that period only. It is because of this principle that your balance sheet always reports information as of a certain date and the profit and loss statement encompasses a specific date range. There are also some limitations to this concept like in case of inflation, there will be an overstatement in the net profit. In India accounting period is 1^st April to 31^st March for every year.

Accounting cost concept: This concept states that all the assets are recorded in the books of accounts at their purchase price. The effect of the cost concept is that if the business entity doesn’t pay for an asset, that item will not be shown in the books of accounts.

It limits the required amount of research and time to record or report financial information if the cost out weights the benefits. This basic accounting principle is important because it reminds the business owners not to confuse cost with value

Dual Aspect Concept: Dual Aspect is the foundation or basic principle of accounting. It provides the very basis of recording business transactions in the books of accounts. This concept assumes that every transaction has a dual effect i.e, it affects two accounts on their respective opposite sides.

Therefore, the transaction should be recorded in two places: e.g. a) giving of cash and b) Receiving of goods. Thus, the duality concept is commonly expressed in terms of the fundamental accounting equation

Assets = Liabilities + Capital

Realisation Concept: This concept states that the revenue from any business transaction should be included in the accounting records only when it is realised. The term realisation means the creation of a legal right to receive money.

For example: Selling goods is realisation, receiving orders is not. In short, the realisation occurs when the goods and services have been sold either for cash or credit. It also refers to the inflow of assets in the form of receivables. This concept helps in making the accounting information more objective. The rule also says that when risk and reward is transferred for goods or services from one person to another then the revenue should be recognised.

Accrual Concept: The meaning of accrual is something that becomes due, especially an amount of money that is yet to be paid or received at the end of the accounting period. It means that revenues are recognised when they are receivable.

It helps in knowing about the actual income and actual expenses during a particular period, which in turn helps in calculating the net profit of a business

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Matching concept: The matching concept states that the revenue and the expenses incurred to earn the revenues must belong to the same accounting period. It guides on how the expenses should be matched with revenue for determining the exact profit and loss for a particular period.

It is a very important concept for the investors/shareholders as it helps to know about the exact profit and loss of a business. This principle works with the revenue recognition principle ensuring all the revenues and expenses are recorded on the accrual basis

Principle of Conservatism: When there is more than one acceptable way to record a transaction, the principle of Conservatism instructs the accountant to record the expenses and liabilities as soon as possible. Using the principle the accountant will be more likely to anticipate losses in the reports

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Posted on March 8, 2021May 27, 2024 by admin-s20

Accounting For Reserves And Surplus

Just the way we categorize our expenditures at the end of every month, various…

Just the way we categorize our expenditures at the end of every month, various business organisations include Reserves and Surplus in their balance sheet keeping their future needs as an organisation in the picture. In simple words, they are the savings of big corporates which can be used as assets during a crisis.

What Do Reserves And Surplus Mean?
Reserves
A financial accounting Reserve is a part of the shareholder’s equity except for basic share capital. A Reserve is profits that have been appropriated for a particular purpose. In accounting terminology, reserve implies the amount set aside for future activities which include buying assets, paying for bonuses or even legal settlements.

Surplus
Surplus describes the amount of an asset or resource that exceeds the portion that is actively utilised. In the budgetary context, a Surplus occurs when income earned exceeds expenses paid.
Reserves and Surplus, as the name suggests, are the accumulated profits that a company has earned and retained over time. Retained profits are the profits that are left after repaying the shareholders. General Reserves are created out of profits and kept aside for the financial strengthening of the company in bad years.

Difference Between Reserves And Surplus
Reserves are the primary amounts that are earmarked by the organisation for specific purposes. Whereas Surplus is where all the profits of the company reside.

Types Of Reserves And Surplus
Depending on their purpose there are various types of Reserves used in a balance sheet.

Capital Reserve
A Capital Reserve is the type of Reserve that is created from capital profits. Capital Reserve is maintained to prepare the company for sudden hazards like inflation, business expansion and funds for new ventures.

Cash received by selling current assets
Excess on revaluation of liabilities and assets

are a few examples of Capital Reserves.

Capital Redemption Reserve (CRR)
Capital Redemption Reserve is created when the preference shares or the capital is redeemed. It is a statutory Reserve. When a company wishes to redeem shares a Capital Redemption Reserve account is created to benefit both the creditors and employees.

A Capital Redemption Reserve comes in handy for the company on a rainy day. Several litigations are attached to this reserve such that the company can open this reserve only under certain circumstances.

Security Premium Reserve
It is the additional amount charged on the face value of any share when the shares are issued, redeemed and forfeited. Security premium account is a part of the Shareholders Fund, it refers to the difference between market value and the face value of a share.

Debenture Redemption Reserve
A Debenture is a debt security that lets the investors borrow money at a fixed rate. A Debenture Redemption Reserve must be created to protect investors from the possibility of a company defaulting.

Debentures are not backed by any kind of asset, lien or collateral. Free Reserves are those Reserves upon which the company can freely draw, Debenture Redemption Fund is one such Reserve.

Revaluation Reserve
Organisations have the freedom to construct line items for assets on the balance sheet when they believe it is a necessity for correct accounting to be presented. Revaluation Reserves are not inherently normal, but they can be used when a business assumes that the value of their assets will fluctuate after a certain time frame.

Other Reserves: Specifying Nature And Purpose

Surplus
Surplus i.e balance in statement of profit and loss disclosing allocations and appropriation such as dividend, bonus, shares and transfer to/from Reserve etc.

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Why Are Reserves And Surplus Called Liabilities?
Aren’t Reserves supposed to be good? They are money set aside for future endeavours and hazards, How is being financially safe considered a liability? Isn’t having surplus money a boon?

Well here are the answers to all your queries,

Reserves are considered on the liabilities side of a balance sheet because they are sums of money that have been set aside to be paid out on a future date. To be more precise Reserves are considered a liability keeping the peasant scenarios in mind. Reserve is considered a liability keeping all the future requirements in mind.

Reserves also represent the obligations that the form has, which makes Reserves a liability item. Reserves can be future or potential obligations to various stakeholders or future use of funds to benefit various stakeholders.

For a better understanding, we can compare Reserves to a bank, though the bank is always expected to have money, yet it is considered a liability keeping in mind that money is not for the bank but to meet up with the financial needs of their account holders.

What Is Meant By A Negative Reserve?
Negative Reserves are considered as assets, for example, the money which is due to the policyholders i.e debtors. But these are assets which may be realised or forgetting that the policyholders may withdraw, leading to a policy lapse.

To conclude, accounting at the end of the day is an asset to our lives, it is a massive ocean of its own, here is the address of an Accounting institute in Ahmedabad, they offer various Accounting Training in Ahmedabad that will turn you from a liability to an asset.

Posted on February 10, 2021May 27, 2024 by admin-s20

Fixed Asset Accounting

Accounting involves keeping and maintaining the record of a corporation’s financial transactions in a…

Accounting involves keeping and maintaining the record of a corporation’s financial transactions in a given year. The annals are further used for analysis by the stakeholders, agencies, and tax collection bodies making accountants a crucial wedge in the company’s innards.

Of the concepts an accountant should be well-versed with, the ones of assets and liabilities are the most basal yet indispensable. Here we introduce you to the fundamentals of fixed assets and their accounting.

What Are Fixed Assets?

Fixed assets are the non-liquid physical possessions an organization holds to generate income over the long haul. They are also referred to as capital assets or property, plant, and equipment (PP&Es).

Fixed assets are not to be done away with in the same accounting year. The list comprehensively includes land, vehicles, office spaces, computers and software licensing, buildings, etc.

The principal criterion for anything to identify as a fixed asset is that it should be held by the company for more than one accounting year. Also, they are tangible and intangible. Long-term bonds and securities don’t make it to the list.

An esoteric aspect of fixed assets is that their book values usually exceed the capitalization limit as set by the organization. However, a company must be careful while setting a cap limit. A too higher or lower value can have far-reaching impacts on its balance sheet.

How? That requires us to delve deeper into the topic. Here is a verified Accounting Certificate Course in Ahmedabad you can take.

Initial Asset Inclusion

It is done at the time of purchase of an asset.

Now, before adding to its capital stock, a corporation makes the requisite assessments. It compares the total cost incurred on the asset with the gross amount of cash flow it leads to. If the deal seems profitable, it is sealed.

The initial recordation incorporates the cost of the assets, their transportation and installation amount, testing and preparation fees, taxes, and other such expenditures. Meanwhile, administrative charges, general overhead costs, and expenses not directly enhancing its utility are not recorded here.

When an asset is purchased at its market value, we note its fair value. On the other hand, the interest amount has to be mentioned while documenting for an asset bought on credit.

The case of an asset being exchanged for another one calls for recording the fair value of the new body. While if it is not possible to assess its cost, the price of the one given up is considered.

Depreciation of Assets

Assets start losing their productivity or we say, they get used up with time. We need to make allowances for this downturn. In accounting, depreciation is apportioning the cost of an asset over its useful life.

Of all the techniques to account for the depreciation of assets, the written down value method is extensively used. As it shows the fair value of the asset at every end of the year. In this method, depreciation is more in the initial year compares to subsequent years. Another method of depreciation is the straight-line method. Here, the accountants are required to subtract the salvage value of the asset from its cost. The resulting difference is then divided by the number of years the company intends to hold the asset for. The figure they arrive at is the yearly monthly depreciation of the asset. In this method, the Depreciation of asset is uniform during the life of the asset.

Companies can choose their modus operandi. However, as per the caveats of the IAS (International Accounting Standards), they are allowed to change it only once. To know more about the IAS and their impact in the field, you can go for this Accounting Course in Ahmedabad as recommended by our experts.

Disposal Of Assets

After a certain point, when assets cease to be profitable, they are to be exscinded. It is usually done when their useful lives come to an end. Sometimes, an unforeseen circumstance (for instance, unexpected obsolescence) forces the company to discard an asset.

It is however not necessary to throw a valuable possession away when it can be liquidated. The company can exchange the asset for newer ones. Also, they may sell it off. A price higher than the then book value of the asset marks a profit and a lower one points towards a loss.

Whatever the case may be, the loss of a company’s asset shows on its balance sheet. Fresh investments need to be undertaken.

Asset Impairment

Impairment of an asset is where its current carrying value exceeds the gross profits it is estimated to bring in. It is usually the result of unexpected predicaments.

In simpler words, asset impairment has to do with the chance that fixed capital may not be as economically viable as it is computed to be. Impairment leads to a radical slump in a business’ profits. Asset impairment on the balance sheet is associated with a corresponding loss in the income statement.

Intangible holdings such as copyrights and trademarks stand higher chances to get impaired. However, under circumstances like unexpected obsolescence, natural calamities, adverse market fluctuations, judgment failures or may be due to some unaccountable reason, fixed assets may undergo the same fate.

Accountants are supposed to be on the lookout for such incidents. They must warn the stakeholders and the decision-makers of the company’s state of affairs.

Disclosure Of Assets

A corporation does not want every confidential detail to be presented on its annual financial statements. However, certain norms formulated by the national and international bodies need to be followed. An organization has to make the following disclosures about its fixed assets.

The carrying value of the assets at the beginning and the end of each accounting year
The useful life of the assets
Rate of depreciation and the method used to calculate it
The effects of acquisitions, disposals, and net foreign exchange on the value of the assets
Impacts of revaluation

To learn about other disclosures, go to the link for this certified Accounting Training in Ahmedabad and stake in your growing accounting expertise.

The Strict Don’ts

While accounting for fixed assets, you need to eliminate the three commonly made mistakes.

Not considering expense costs transportation charges, taxes, and installation amount while recording the purchase of a new asset
Disregarding the alteration in the assets’ use while maintaining them
Ignoring record-keeping demands relating to insurance

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