In the accounting world, there are two main ways of preparing your books and financial statements. These two methods are accrual and cash. Although they have some similarities, there are large enough differences between the two to make accrual the most widely used because of its greater accuracy.
For statement purposes, accrual accounting is much more fair and accurate when compared to cash accounting. Read more
There is absolutely no doubt that business owners, especially those with small businesses should have a firm understanding of the basics of accountancy and bookkeeping. This is not to suggest of course, that they should be able to set themselves up as accountants in their own right, or indeed that they should be attempting to take the place that should rightly be filled by an accountant in their own business, but far too many business owners totally abdicate all responsibility for their business finances and hand it all over to their accountant, without the slightest idea what he will do with it.
This state of affairs is a very dangerous way to run a business of any size; a good business owner should be able to sit down with his accountant and discuss things, and understand what he is being told. Read more