Accounting itself is a process that identifies the financial data, records, and as the end result, the financial statements. There is little difference between the accounting and bookkeeping. Bookkeeping accounting is actually part of the process of recording only. While the accounting includes the identification and communication.
These financial statements are the end result of the accounting process. Included are statements of loss / gain, changes in capital, balance sheet, and cash flow statement (see examples). Loss / gain is used to provide a picture of the company's financial performance, while the balance sheet to identify the company's financial position. The financial position in this regard is the position of property, debt, and capital. The objective of financial statements is to provide information to certain parties regarding the position, performance, and changes in financial position so useful as a basis for economic decision making / business.
Indonesia, like many other countries, its economy is dominated by medium and small companies are still not fully aware of the usefulness of accounting too. Broadly speaking, a store can determine its financial condition. If profitable, the stock of goods will increase and vice versa. But if anyone asks how much real benefit, they can not know.
Such a situation is a lot found everywhere, not only in Indonesia. If indeed there is implemented an accounting system, usually just for a formality.
Actually, if this sort of business accounting needs? The answer is not always true. Depending on the cost and benefits are. In general, the usefulness of accounting are:
- Owners can see the advantages for certain companies
- Easier cost control
- Monitoring the company's assets
- Liquidity and solvency is certain
- Financial forecast
