Research Paper on Key Tasks Performed by an Accountant

Introduction

An accountant is a qualified expert who offers administrative roles within the company`s operation. The accountant is responsible for the handling of financial operations within the organization. Apart from collecting financial reports, keeping the records, and generating the financial report for the company, also, an accountant can be the financial adviser of the organization in terms of budgeting as well as doing interpretation of financial records for interested parties like the vendors, investors, and financial institutions (Elliott et al. 2010).

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An In-depth detail of the functions of an accountant, one of the roles of the roles is to manage financial data. In this case, the accountant is responsible to collect, and maintain the financial records of an institution. The sophisticated duties therein include ensuring the file are in safe custody, the records are updated, makes financial statements, and established and monitors control procedures.

Besides, an accountant offers advice and analysis of the financial records. The accountant offers critical data analysis regarding the financial position of the business thus the information facilitates decision making in the company (Credit Best Practices. 2013). Regarding this, the accountant allocates finance to different proportions including managing payroll system, and allocating finance to different department. Besides, the accountant offers financial breakdown for the interested parties during a presentation. Moreover, the accountant solves the discrepancies and irregularities that are within the financial records.

Another critical role involves the preparation of financial reports. An accountant prepares financial reports on either monthly or annual basis (Johnson, 2017). The accountant prepares all the financial statements including the balance sheet, the trial balance, income state, profit and loss account, and ledger books among other statements. The reports become relevant for the organization because they offer detailed information helps the company stakeholders to make strategic decisions for the company.

The main difference between an accountant and a bookkeeper is that accounts have the knowledge to handle the entire accounting process whereas the bookkeepers have the knowledge of handling and recording financial transactions into the double entry system (WILD, 2004). Therefore, to achieve accuracy, the accountant must review and make final accounts from the financial documents prepared by the bookkeeper and advices the bookkeeper where necessary. It is apparent, the bookkeeper records financial transactions in books of entry whereas the accountant uses the information to provide an analysis of the financial data and prepare final accounts for the business (South-western Publishing Company, 1921).

In summary, the following table shows the difference between the roles of the financial accountant against the roles management accountant:

Both the financial and management accountants discharge different duties (Kelly, 2015). A financial accountant prepares documents that are reviewed buy external parties. Financial accountants prepare financial statements like cash flow statement, income statement, and balance sheet. For example, a financial accountant review and oversee accounting transactions made by employees within the accounting office. When breaking down this role, a financial accountant can opt to review the transactions of accounts payable department. Therefore, the general role entails inspecting the account books to minimize accounting errors and maybe advice the department the way to increase sales and reduce expenses.

A management account is important in an organization because the management accountants incorporate the .various techniques to collect financial information and present the information to the managers. Such duties include preparing budget, monitoring expenditures, analyzing the financial performance, and doing internal financial audit. The information the management accountant provide helps the organization to make internal decisions.

Use the Principles of Double Entry Book Keeping Demonstrating the Process of Producing Ledger Accounts

The universal principle of double entry of bookkeeping states that every transaction has two entries: the credit entry and the debt entry. A ledger contains a 'T' format. In the ledger, the debt side in on the right hand side which records debt entries whereas the credit side is on the left hand side that records credit transactions. On top of the table, a name of the account affected by the transaction is indicated. For example if the transaction is the purchase of machinery, the ledger table should be indicate the name 'Purchase of machinery account'

Examples of Transactions That Affect Income, Expenses, Assets, and Liability

A transaction like rent receivable affects the income of the business. Rent receivable increase the income thus on a ledger account, receivable is put on the credit side of the ledger account. For example, if Tom pays rent worth $250, the transaction will affect the rent income ledger and Tom`s ledger account.

When a transaction affects expenses, the transaction that decreases the expense is put on the debt side while transaction that increase expenses are put on the credit side. Some of the examples of transactions that affect expenses payment of wages, purchase of office stationary, and marketing are amongst other transactions. On the other hand, those expenses that increase expenses fall on the credit side of the subsequent ledger account.

Besides, many transactions affects assets in business. A transaction that increases assets is put on the debt side while transactions that decrease assets are credited. For example, the purchase of a vehicle, office furniture, computer equipment, and other machinery affect assets.

When a transaction that affects liability is done, those transactions that increase liability are credited while those that reduce liability are put on the debt side. For example, if person X take a loan from the bank, the transaction is recorded on the credit side while it is debted on the subsequent debt account.

The Figure below shows the 'T' format of a ledger.

In summary of the rules to follow when making entries in the ledger, it is important to note the side effected by a particular transaction on the ledger account. Below is the guideline for all the transactions made on the debt side:

Profoundly, every transaction falls into one of the four categories: An asset, a liability, an expense, and income. Therefore, whenever, when making an entry you first classify the effect of the traction on one of the above-mentioned parameters.

All the transactions recorded on the debt side must demonstrate the following:

1. For the asset-a transaction must increase the assets
2. For the Income-a transaction must decrease the income
3. For the expenses-a transaction must increase the expense
4. For the liabilities-a transaction must decrease the liability
5. On the other hand, all transactions recorded on the credit side must meet the following criteria:
6. For the assets-the transactions decrease the assets
7. For the income-the traction affects the income positively
8. For the liabilities-the transaction increases the liability
9. For the expenses-the transaction must decrease the expenses.

In summary, the above parameters are used to predict the side of making an entry in a ledger. After analyzing a transaction, you weigh the accounts affected by the transaction then determine whether which side should to debt and credit. For this reason, the principle of double entry finds meaning because each transactions brings effect of the two sides, the credit and debt side thus double entry.

A Trial Balance From a Given Set of Ledger Accounts From Mr. Khan Sole Proprietorship Venture.

The table below shows a trial balance for Mr. Khan sole proprietor:

Evaluate the Process of the Production of the Trial Balance and Check It for Accuracy

A trial balance is a source document that helps to manager financial information by checking the accuracy of the entries in the ledger book ("The trial balance | Example | Format." 2017). A trial balance has three columns namely: the category, debt, and credit columns. When transactions from the ledger accounts are made appropriately, the total debt must be equal to the totals on the credit side. Therefore, a trail balance can tell you at a glance if there in an error in the ledger either an error of omission, error of principle or error of commission.

Finally, a trail balance is not a complex statement because it involves filling of details from ledger. If a person knows how to classify the ledger entries: whether debt or credit then it is easy to make the trial balance.

Types of accounting errors

The error of omission happens when the bookkeeper omits transactions at the time when recording transactions in the subsidiary books. When a transaction is noted recorder in a journal does not affect the trail balance.

The error of commission occurs when a transaction is put in the wrong original book of entry. For example, posting the wrong figure or posting the wrong side of the ledger results the error of commission.

The error of compensation happens when more than two errors reciprocally nullify the effect of the other. For example, the first error might reduce the debt side the same way it reduces the debt side. Such errors do not affect the trial balance.

The error of duplication happens when the bookkeeper does wrong posting of a transaction. Lastly, the error of principle is committed when a violation of the rules of double entry happens. Such errors include recording the purchase of furniture to office expense account.

A suspense account is a...