Bookkeeping And Accounting Case Study

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First point of the importance of bookkeeping and accounting is better financial analysis and management. Martins (2008) suggest that, in a business the most importance thing is cash flow management this is due to if you delay the invoice, no follow-ups on customer payments and falling out on supplier’s list of customers will eventually crash you down. For prevent this situation, bookkeeping can help systematic it up from up-to-date follow-ups, invoicing and on-time payment for suppliers. Next, getting help and provide information when do a decision making. An accurate book of accounts will help you see where your business is and where it is going in the next several years (Importance of bookkeeping, 2010). For example, can analysis the gross income, determining the health of the business and anticipating cash flow issues. Taxes is another point that importance in a small business. When u start a commercial entity, merchant must have a file an income tax and pay income taxes (Emerson, 2012). The information of pay income tax need to be accurate and presented in a professional manner. After that, monitor the financial success or failure of business. Bookkeeping allow merchant to see whether their business is profit or loss. Emerson (2012) suggest that bookkeeping and …show more content…

By applying the matching concepts, the bookkeeping is requiring to record the revenue and expense in the same period. The matching principle is to ensure the profits are accurately reported for each accounting period. For this reason, the accrual accounting method requires end-of-period adjustments to be made to the business revenues and expenses while the cash method does not. These end-of-period adjustments create accounting transactions known as accruals (Baskerville,

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