Accounting is a critical discipline in the commerce sector since it provides overall guidance on how to conduct business. Nevertheless, we can disintegrate this functionality into multiple roles. First, accounting diminishes the human burden to remember all the business details by offering a means to record the countless transactions undertaken. Accounting avails a means to store business data chronologically. The chronological storage ensures that any record pertaining to the entity’s operations is accessible. Secondly, accounting guarantees recording of an organization’s assets hence, preventing misuse and theft. Values of assets appear in ledgers accounts, T accounts and in the balance sheet. The reduction in an assets’ worth is an expense set off against an entity’s revenues. Accounting also assists in the determination of a business’s returns. This is a vital task of accounting since individuals indulge in business with a motive of profiting. Therefore, determination of profitability is a fundamental task of accounting. Accounting elaborates the charges that are allowable against an organization’s proceeds. Additionally, this discipline also establishes cash inflows that are proceeds to the entity. The profit results from deduction of expenditures from cash inflows. Accounting avails multiple details pertaining to an entity, subsequently aiding in decision-making in an organization. Accounting also aids in decision pertaining to the acquisition of capital and business operations (Needles & Powers, 2008).
Basic terminology
The debit side is an accounting terminology that denotes the left column of any account. Additionally, debiting denotes listing of an entry on the left column of any account. Conversely, crediting denotes inclusion of an entry on the rights side column of an account. These two terminologies are fundamental to this discipline and constitute vital concepts of accounting. Revenues and incomes represent common terms in this discipline. The terms denote monetary inflows into the entity. Contrary, expenses denote monetary outflows from the organization. Liabilities denote responsibility of the business towards other parties. Liabilities entail loans, creditors and unpaid expenses, which the business settles latter. Capital is a recurrent jargon in this discipline that signifies the monetary investment that finances the business. Capital is a vital constituent in the valuation of a business. Auditing evaluates records to establish if records make a fair representation of the entity’s monetary position. Auditing generates a report of findings that evaluate the reliability of accounts. Recommendations in the report have severe consequences on the outlook of a business. Balancing accounts imply offsetting of all credit entries against all debit entries in an account. The balance that results from offsetting of the entries represents an entry in other relevant accounts (Needles & Powers, 2008).
Impact of accounting
Accounting is a demanding profession since it has ethical requirements. The ethical requirements guide the undertakings of accountants. The most critical standards include diligence, objectivity and independence. The standards have influenced me significantly since I have to adhere to the above requirements constantly. Consequently, I have assumed these values in most of my undertakings outsides employment. Ethics aim at preventing corporate failure by ensuring that accountants are objective in their reporting. I have embraced this imperative value since it ensures sincerity in my daily undertakings. Overall, the ethical requirements have affected my life extensively (Cohen & Pant, 1991).
Implication of computerization on accounting
Minute entities have minimal transactions. Consequently, they profit from this by having a reduced work force. There are minimal records of operations in such entities. Computerization has made recording of transactions easier. Subsequently, small business can embrace this practice effectively. Computerization of accounting has multiple implications since it ensures proper recording of the activities of small entities. Additionally, it advances decision-making in these organizations. Overall, the impacts of computerization have culminated in apt management of minute entities (Heintz & Parry, 2010).
References
Cohen, J., & Pant, L. (1991). Beyond bean counting: Establishing high ethical standards in the public accounting profession. Journal of Business Ethics, 10(1), 45-56.
Heintz, J., & Parry, R. (2010). College accounting. California, CA: Cengage learning.
Needles, B., & Powers, M. (2008). Financial accounting. New York, NY: Cengage learning.