Taxes are one of the most important reasons for a home business to keep accounting records.At the end of the year, you need to show money made and money paid.
When you learn something new, like accounting concepts and terms, it helps to create links between what you already know and what you are trying to learn.
If you track your income and outgoings every day, preparing your personal annual statement and tax return doesn’t need to be a mammoth task.
As trends change, accounting is becoming more diverse and less just a task of bookkeeping ‘crunching numbers’.
Much of accounting is concerned with basic bookkeeping, but the owners of a company are most concerned with the information contained in the financial statement.
If everyone involved in the process of accounting followed their own system, or no system at all, there’s be no way to truly tell whether a company was profitable or not.