Accounting refers to the systematic recording, valuation, and presentation of assets and liabilities in the preparation of a balance sheet. It is part of the Annual financial statement and builds on the ongoing Financial accounting On.
Basics
In the context of accounting, assets and liabilities of a company are presented in contrast to each other as of the balance sheet date. This is based on previously recorded business transactions. double-entry bookkeeping.
The assessment is carried out in accordance with legally established principles.
Legal framework
Accounting is subject to commercial and tax law regulations. Companies that are obliged to keep double-entry books must prepare annual financial statements including a balance sheet.
Note: The principles of proper accounting are particularly authoritative.
Systematic classification
Accounting is closely related to:
It represents the completion of the ongoing accounting for a financial year.
Key elements
- Balance sheet date
- Asset valuation
- Debt collection
- Reconciliation of accounts
Typical procedure
- Completion of ongoing bookkeeping
- Content alignment
- Valuation of Assets and Liabilities
- Balance sheet creation
Practical relevance
Proper accounting requires structured and complete financial bookkeeping. Errors in ongoing bookkeeping can have a direct impact on the balance sheet.
Typical sources of error
- Incomplete account reconciliations
- Incorrect valuation of assets
- Unrecorded liabilities
FAQ
What is accounting?
The systematic presentation of assets and liabilities in a balance sheet.
Is it mandatory for every company?
It is mandatory for companies that are obliged to keep double-entry bookkeeping.
What is it based on?
During the ongoing financial accounting of a financial year.
Conclusion
Accounting is a central component of the annual financial statements and is based on proper double-entry bookkeeping. It serves to provide a structured overview of a company's economic situation.
Brasser Accounting Solutions GmbH is a specialised accounting service provider and part of a corporate group with Quint GmbH (tax consultancy/auditing) and Service Place Årjäng AB (Swedish tax office). BAS exclusively performs services according to § 6 No. 3 and 4 StBerG and does not provide tax or legal advice.
