An introduction to accounting
Essay On Accounting
One of the first challenges faced when to start companies is how to deal with laws and regulations. How to keep accounts and what is an accounting are some of the most common issues for entrepreneurs and new firms.
What is an accounting?
A good start might be to think of an accounting as a documentation of the financial transactions your business does. Remember also that an accounting has more users than the company itself.The accounts usually consist of three main points, results, balance sheet and cash flow.
The result – shows the revenue and profitability
The balance sheet – shows what the company owns and how the assets are financed
Cash flow – shows the cash flows that come from the company’s operations (operations, finance and investment).
KEEPING OF DOCUMENTS
A document is evidence of a transaction. Bookkeeping Act states that there should be a documentation of all entries in the accounts and all vouchers must be marked with the document number. Documents to be stored for 10 years.
Accounting and book-keeping obligation
Accounting is not the same as the accounting requirement. By statutory obligation to submit annual unit to Brønnøysundregistrene each year.Even if you do not have the statutory obligation does not mean you can let the weather to keep accounts. As a business, you are subject to accounting requirements. This means that one must keep accounts and have a system between the leading accounting and Appendices.
WHO HAS THE STATUTORY OBLIGATION
All limited companies (AS and ASA).
Partnerships (DA / ANS) that have either sales revenue above 5 million, the number of employees more than 5 years in average, the number of participants over 5 or that some of the participants are legal person with limited liability.
Sole proprietorships with assets exceeding 20 million or an average of 20 man-years per year.
Sole proprietorships has limited financial accounting purposes.
Foreign companies which have activities in Norway and is taxable in Norway.
As previously mentioned: If you are not accounting required, you still have bookkeeping obligation if you do business. (For more information see Accounting or Bedin).
Who can keep accounts?
To ensure that the accounts are done correctly and efficiently, it pays to use a certified public accountant, unless you have a good time and insight into the accounting yourself.There will of course also depends on the size of the company and the number of vouchers. It pays usually focusing on what you do best and leave other tasks to specialized. The accounts are among the most important thing in your business, so you should have full control of it.