Accounting Features That Helps UAE Companies
Accounting is the recording of financial transactions along with storing, sorting, retrieving, summarizing, and presenting the results in various reports and analyses. Accounting is also a field of study and profession dedicated to carrying out those tasks.
It is expected that the accounting principles should be feasible, predictable, and applicable. This should be easy to apply in the accounting system and should be easy enough to be implemented by everyone.
For example, if there are fixed assets shown in the balance sheet, then the replacement cost will be difficult, and variation and people will cause variation and market price. It should not change according to the people but should remain the same.
Accounting has a unique feature of recording every financial transaction. It provides a provision of recording the transaction in a detailed manner which can be used by the companies. The recording is systematic and can be done anyone who is adept in accounting basics and laws.
The recording is done by similar grouping entries under a single title which makes it easy for classifying all financial transactions.
Accounting provides a feature of classifying all of the financial transactions into a different category. These categories are grouped according to their similarities in one place. For example, all of the payments received, and the receipts will reflect in the cash book or memo book.
This helps to categorize all similar transaction under one heading, which helps in finding them makes it easier. The books in which the process of opening the accounts is completed is called a ledger.
The accounting principles are found to be useful and provide important information to the one who tries to find it in a simple way. There are different categories and headings under which different transactions are classified, which makes it for the finder to locate a particular transaction easy.
These entries are useful to determine and locate the nature of the transaction and to analyze its effect on the overall balance sheet.
A principal has relevance when it has figures and facts. Accounting principles full of figures and supporting facts which makes it very relevant. It is ensured that personal whims and biases are not included in the case of accounting, which makes it bias-free.
This is the reason why accounting is said to be objective.
Accounting is known to provide summaries of relevant and complex financial statements. Statements of cash flow, fund flow, and balance sheet are summarized simply and presented to the investors and the public.
These statements are useful for investors to make investing decisions. Summaries also provide exams on the overall financial health of the organization without taking a lot of time. A statement such as profit and loss statement and balance sheet are mirrors of the company, and the summaries are considered to be very important statements.
All the statements which are generated by a certified auditor for finance department or even a bookkeeper can be audited and confirmed for their validity. Every entry of the accounting system is related to the financial transaction of the company, which is why the financial statement is a glimpse into the mirror of the organization.
All of these entries can be validated and confirmed to test the validity of the statement.
A summary of the financial statement can be read by any knowledgeable person and can be interpreted. The interpretation is universal and does not differ from person to person or auditor to auditor. It remains constant irrespective of the person interpreting it which gives it a feature of universality.
The interpretation can be analyzed and found out whether the financial health of the organization is in a good position or a bad position. The performance of the business can be determined with the help of accounting statements.
Maintaining Your Books with Alya
Alya Auditors combines the use of advanced software with the guidance of accounting professionals. Our customers benefit from a team of trusted, in-house experts ready to meet your accounting needs.
Our powerful software integrates with a variety of accounting software partners, such as Xero,Tally and Quickbooks, to automate monthly reports and free you to focus on the success and expansion that you strive for with your small business.
When you are ready to hand off the chore of accounting and focus on the business you love, Alya is your financial headquarters. We have powerful software that can save you time and money to get started today.