Accounting in small business refers to a collection of duties that center around keeping a general ledger – your books – and generating financial statements. Accounting encompasses many more areas than small business accounting. In this post, we’ve compiled a glossary of accounting words to help you navigate the world of accounting.
Cost accounting
This accounting method examines the cost of things for sale. It is extremely beneficial in manufacturing, construction, and even restaurants, where dozens or even hundreds of components are acquired and combined to create the goods for sale. Cost accountants track and assess these expenses to identify whether they are too high or low and should be repricing or purchased differently.
It may also be used to assist small firms with pricing, calculating break-even points, reducing expenses, and budgeting.
Government accounting
This is simply accounting for government agencies. Government accountants are concerned with adhering to government rules as well as mastering a new method of bookkeeping.
Nonprofit accounting
Nonprofit accounting is distinct in that it frequently requires nonprofit organizations to monitor and record particular gifts, administer grants and satisfy reporting requirements, fulfill public disclosures and reporting, and maintain a fund accounting procedure.
Financial accounting
Financial accounting entails the creation of financial reports for external use, as well as the provision of financial statements.
Attest
Attest accounting is the procedure by which a CPA verifies a company’s financial reporting for interested third parties such as banks and the general public. Compilations, evaluations, and audits are the three primary services provided in this field. These services are only available from a CPA.
Fraud or Forensic Accounting
Forensic accountants are accounting specialists who may assist a firm that has been the victim of fraud. There are additional services offered to assist decrease the likelihood of fraud.
Tax accounting
Tax accounting encompasses a wide range of services, including the preparation of federal and state income tax returns for businesses, individuals, and other entities such as estates and trusts; state and local tax collection, filing, remittance, and compliance; franchise tax support; and payroll tax collection, filing, and payment. There are more, but these are the most important.