Accounting is generally described as the centre of any business enterprise and for a good cause. It’s involved in almost every aspect of an organisation’s finances – from monitoring its performance to ensuring it meets all the legal requirements.
The reasons are simple: it’s impossible to become a successful ACCA professional without understanding the functions of accounting. This post explores the basic concepts, tasks, and aims that make up the essence of accounting and is a perfect guideline for those willing to take an ACCA course.
Introduction: Accounting Basics for ACCA students
Accounting, also known as accountancy, includes creating, processing, summarising, and communicating financial information about any economic entity.
Accounting is not a calculation. It is a communication that conveys a fiscal story to make, manage and avoid risks and guide organisations toward success.
It is always challenging to comprehend the simplest aspect of accounting if they are doing ACCA. Accounting ensures businesses obey the law, hence steering clear of legal troubles.
Accounting to the investors presents a clear position and understanding of the performance of the business and the causes of its profitability, which assists in investors' decision-making.
In the same way, government authorities also rely on accounting information to determine and assess proper taxes. The last major advantage is adequate control over cash flows since accounting controls inflows and outflows, prevents financial pressure for various organisations, and facilitates expansion.
Understanding the Core Functions of Accounting
Accounting encompasses several key functions that form the foundation of any financial system.
Let’s explore these functions in detail:
1. Recording Financial Transactions
Accounting involves the meticulous recording of financial transactions. Known as bookkeeping, this process ensures that every rupee gets accounted for.
2. Preparation of Financial Statements
Financial statements give stakeholders insights into a company’s financial health. As part of the ACCA guide for beginners, mastering financial statement preparation is a must-have skill.
3. Compliance with Laws and Regulations
In India, the extent of companies’ GST and income tax financial reporting compliance is zero. Such regulations help organisations to stay out of the wrong side of the law.
4. Budgeting and Forecasting
Budgeting and forecasting are tools businesses use to provide direction on the right course of action to take, while forecasting presents future expectations.
5. Auditing and Internal Controls
Auditing helps to check the credibility of the financial information. While internal controls help minimise risks such as fraud or errors.
Mastering Financial Accounting: Key Topics in the ACCA Module
The module under ACCA offers students sufficient ground in preparing and interpreting financial statements that meet international standards. It provides practical assistance in understanding the obligatory elements of financial accounting.
Key Topics Covered in ACCA
- Double-entry bookkeeping: This includes understanding how transactions alter the financial statements.
- Trial balance preparation: Protection of assets documented in accounting records from bias and impression.
- Control accounts and reconciliations: Examples of the objectives that are the core of business decision-making and internal control include checking and ensuring conformity between the department's records and financial statements.
- Accruals and prepayments: Recording and quantifying the income and expenditure figures at the right business cycle time.
Core Accounting Principles Every ACCA Student Must Know
To excel in accounting, one must adhere to fundamental principles.
1. Accrual Principle
Recognise revenue and expenses when they occur, not when cash gets exchanged.
2. Consistency Principle
Accounting practices should remain consistent across periods to ensure comparability.
3. Prudence Principle
Always account for potential losses but never anticipate gains.
What are the roles and responsibilities in Accounting?
Financial health covers different roles and responsibilities in accounting, including accuracy, compliance, and strategic financial management.
Here are the primary roles and responsibilities:
- Financial Transactions Recording
It includes recording of all financial flows such as income, expenses, assets, and everything related to finance.
- Preparation of Financial Statements.
Compiling documents that are important when it comes to the preparation of balance sheets, income statements, and cash flow statements will enable you to come up with the overall picture.
- Strategic Decision Making
This financial information is useful in strategic planning and decision-making processes in management.
- Regulatory Compliance
Ensure that the organisation’s financial practices are in compliance with the current prevailing financial laws and policies, and ensure that all the practices meet the legal and set industrial standards.
- Risk Management
It includes the process of finding out the financial risk and then looking for ways of minimising it in order to safeguard the organisation’s assets and the profitability of the organisation.
Tips for ACCA Students: How to Excel in Accounting
- Master the Basics: Build a strong foundation in accounting basics for ACCA students.
- Leverage Technology: Familiarise yourself with accounting software like Tally and QuickBooks.
- Seek Practical Experience: Intern with firms to gain real-world insights.
- Engage in Continuous Learning: Stay updated on the latest financial regulations.
Conclusion: Imarticus Learning’s ACCA programme will transform your career.
The world of accounting awaits you with opportunities as vast as your ambitions. With dedication and the right ACCA guide for beginners, you can learn the core accounting principles and secure a position in this exciting field.
When you enrol in the ACCA course at Imarticus Learning, you will get a 100% placement guarantee once you complete the first two levels of ACCA.
Imarticus Learning cuts through the vast ACCA curriculum. If you don’t pass, you can go take the course all over again and all sessions without incurring any more costs.
At the professional level, the ACCA course includes an intensive pre placement boot camp. In this boot camp you’ll receive resume building services, interview preparation, soft skills training, personality development workshops and guaranteed internships at top companies to set you up for a successful career.
Start your journey today!
