Loading...

Please wait ...

What are the basics of Accounting?

bark profile image

Alex, Staff Writer

Thursday, 18th February 2021

Whether it’s a personal balancing of books, assessing a business’ income and expenditures or planning a career in accountancy, counting numbers has many uses. Understanding the basics of accounting will not only help you in the short term but it also can help you if you aim to pay for these services. Hiring your own accountant or accounting firm can be fraught with jargon, legalese and hidden terminology.

Read on as we break down the basics of accounting, leaving you with a much clearer understanding of the process and the profession overall.

Types of Accountancy     

To understand the basics of accounting, we first need to take a look at the different types of accountancy and how they define themselves under the umbrella term. 

  • Corporate accounting 

  • Public accounting 

  • Government accounting 

  • Forensic accounting

Corporate accounting

One of the most common forms of accounting is corporate accounting. This type of accounting is used to fill out a company’s financial data and used later on to comply with external reporting and tax compliance.  

Public accounting

Public accounting works closely with tax regulators and financial reporters, making sure regulations are followed down to the letter. Employment for a public accountant can be found in public accounting firms that serve external clients. 

Government accounting

Government accounting is done through governmental departments and deals with governmental positions.

Forensic accountancy

The final type of accounting is forensic accountancy. This is far more intricate work and revolves around obtaining financial information that is difficult to source and piecing it back together.  

Learning the basics 

Learning the basics of accounting will give you a better understanding of the process and help you to secure the best accounting firm for the job. These basics include subjects such as revenue and expenses, accounting debits, credits, revenues and expenses. These individual terms make up the overall accounting subject and will give you a better picture of your own personal finances or that of a business.

Even if you do not completely understand the intricate ins and outs of accounting, having a basic overview will aid you in managing your finances or hiring an accounting professional to do it for you.

Should I hire an Accountant?

The decision to hire an accountant is never an easy one, and whether it is beneficial to do in the first place is a personal one. If you have a strong understanding of the processes and are confident in settling the business books, then hiring an accountant might not be for you. On the other hand, if you are new to the world of business, have your own financial queries, or simply want to get everything right down to the letter, hiring an accountant is advisable.

An accountant’s cost can vary hugely, depending on where you are in the country, the company you hire, and the services you require. When it comes to business, it is far better to spend the relatively small fee of an accountant, rather than pay out in fines or worse, if you fail to comply with governmental tax guidelines. 

Find an Accountant near you

The average rating for Bark Accountants is 4.9, based on 53,229 reviews.

4.9/5

based on 53,229 reviews

Get quotes from Accountants near you