Characteristics and Significance of a Business Accountant
The primary and foremost work of a business accountant is – to deal with the business processes. Business accountant understands the language of business by recording, classifying, analyzing, and reporting the financial data. In fact, business organizations need to maintain the record of their money transactions. By virtue of having specialty in accounting, an accountant is the most suitable for this job.
However, while accounting the business procedures, accountant needs to consider the type of business because every business is not alike rather it varies from one another. By applying the system of debits and credits, popularly known as double-entry accounting; accountant uses a general ledger to track the transactions of money (i.e. debit and credit) of the business proceedings. He records the data of every financial transaction on a balance sheet that gives a general overview of financial condition of the business.
Business accountant records and maintains the data of every financial transaction in such a manner that it balances the equation i.e. Assets = Liabilities + Owner’s Equity or capital.
Balance sheet of accounting comprises of assets and liabilities. While preparing a chart, an accountant makes a separate sheet and numbering schemes for the assets and liabilities. Assets include all those things that the respective company owns such as cash deposited in the bank account, company building, machinery, car, and many others (owned by the company). Apart from these physical assets, the rights and claims possess by the company are also assets such as patents, the exclusive right to make use of a trademark and goodwill from the acquisition of another company. These are commonly known as intangible assets.
On the other hand, the liabilities are the obligation of the company. Payable accounts (paying salary of the employees and paying tax are liabilities) and providing the quality services to the customers are liabilities.
Moreover, accountant needs to maintain the record of balance sheet consistently because the fundamental of accounting is contingent upon the periodic recording and reporting of financial data. It includes: