The basic tasks of accounting

In the following contribution, the tasks of accounting are shown, and the principles of bookkeeping are also mentioned.

Tasks of Accounting

For the management of a company to perform its duties, it needs information about the current financial state of the company. Accounting must provide information on the development of profit and loss. Another task is to keep track of the claims and liabilities of a company. This ensures that financial funds are available in a timely and sufficient manner for the payment of debts. On the other hand, the company needs the information for dunning processes. In case of disputes, the accounting receipts serve as evidence. Accounting also plays an important role in terms of pricing. Accounting provides information that serves as a basis for the calculation of the company's own products. In relation to the state, accounting enables the calculation of the company's tax amounts.

Principles of Bookkeeping

Due to the significant importance of accounting, high standards are also required of it. The management of a company must be able to rely on the accounting numbers. Bookkeeping is based on three fundamental principles:

• Truth (All transactions must be recorded completely and truthfully)
• Clarity (all processes with financial consequences must be described in detail. As a result, no booking should be made without a receipt, and no figures should be reconciled before booking)
• Continuity (The same type of transactions must always be booked in the same way)

Hence, the three principles of truth, clarity, and continuity must be adhered to in bookkeeping.