The system in which financial transactions of and organization for a particular period are recorded to know the operating results and the financial position of that concern to analyze and communicate the same to interested users is called accountancy. What we all should understand here is that economic profit is a concept related to management accounting which involves keeping a record of all sales, expenses and operating costs for the benefit and reference of the company. I have worked with clients who, before my creation of a decent accounting system, were in the dark on a lot of important areas. Experts should do it. You can talk about fees with these professionals, but never attempt to do accounting procedures on your own without needed assistance. Accounting is the same for both countries, as we follow AICPA as a matter of policy.
There are CPA’s who concentrate on small business start-ups, and set-up the accounting system for small businesses that may include licensing. Book keeping generally involves only the collection of business transactions (transactions) and is therefore, just one part of the process of accounting. About the accounting, this involves the complete accounting process, i.e. identification, measurement, collection, and communication. The basic aim of accounting is to give information to the interested parties to enable them all to make important business decisions.
Therefore, communication of information is the essential function of accounting. Accounting information is communicated in the form of reports, statements, graphs and charts to the internal and external users who need it in different decision situations. Accounting records relate to the transactions that are completed, which provide fairly good account of the transaction of the business organisation. You can use the idea of accrual accounting to pay reoccurring bills that aren’t due every month like your car insurance.
Financial accounting makes provision for financial information but it does not provide non-financial information such as behavioral and socio-economic. If the objective of accounting reports is to influence the behavior through decision-making then it must provide the data concerning the behavior and outcome of human activity to facilitate performance evaluation.
Therefore, the accounting information does not fully meet different types of information-requirements of varied decision making situations. Essentially accrual accounting is recording your income and expenses when they occur, while cash accounting is recording your income and expenses when money changes hands. You can see the advantage of using accrual accounting to keep track of your credit card expenses; In fact, you may even be doing this already.