8 Tricks to Master to Become an Efficient Accountant
If you are pursuing accounting, you need to understand the responsibility on you – a company’s success. As a budding accountant, you may find accounting a tricky affair, primarily due to the befuddling concepts of finance. But altogether, accounting is not an invincible subject when you know the basics. Even as an entrepreneur, you might need day-to-day accounting skills to manage your business.
Accounting isn’t limited to bookkeeping. As an accountant, you have to go beyond just recording sales and managing them on paper. You must know how to analyse the recorded data and financial assignment help the authorities make better financial decisions. You must also learn how to audit financial books and ensure accuracy. But how do you do that?
Now, if you are looking for some tips and tricks for your accounting assignments to help you out, I have just what you need. Let us start from the very root of the problem, shall we?
1. Read books on accounting
Enough of the tips that start by reminding how you need to strengthen your accounting basics! I am going to tell you how to do that – by reading books. Invest in good accounting books, or visit the library often. Start with entry-level books written by actual accountants. On top of my mind, I suggest you read Introduction to Accounting, by Pru Marriott, JR Edwards, and Howard J Mellett.
If you need an upgrade to college-level accounting, you can read Cathy J. Scott’s College Accounting: A Career Approach by Cathy J. Scott. If you are an entrepreneur, then Financial Statements: A Step-by-Step Guide to Understanding and Creating Financial Reports by Thomas R. Ittelson will be the best option for you.
2. Take an accounting course
Often, reading suggested books may not be enough. You may need some customised tutorials or something more. In that case, you can take up courses at the local community college. In light of the raging pandemic, the wiser choice would be to sign up for online accounting courses. You can try out the courses offered at Coursera or Udemy. If you want free courses, you can try out Khan Academy.
These courses will help you develop your analytical and problem-solving skills. With these skills brushed up, you will get better at preparing financial statements, understanding numbers, and making accurate financial predictions.
3. Practise Accounting Basics
Accounting work on the domino principle – every computation is linked with another. So, if your journals are wrong, your balance sheet will not tally as well. Therefore, you need to start at the very root. First off, you need to understand how dual-entry bookkeeping works.
Understand why you have to make two entries for each transaction. Practise writing journals by hand instead of relying on the software to do the back-end journal entries. Also, write the entire explanation within brackets below the journal entry. This will help you remember the concept better. You can check out samples hosted on websites that offer accounting assignment help as well.
4. Know the debits and credits well
Understand the concept of debit and credit and what these represent. If it helps, you can remember which goes where with this simple tactic. Debit always comes under the left side of a T-account, and credit goes to the right. Another critical accounting equation that you must remember at all times is – Assets = Liabilities + Owner’s Equity.
At times, debits and credits can get confusing. For example, debit in asset means they are increased. However, a debit in the liability side will mean a decrease in the total amount of liabilities. This accounting equation will work as a guide at times you are confused.
5. Know the difference between cash and accruals
While cash and accruals are both assets of a business, the nature of both is different. Let us understand this with an example. Suppose you go to a café and buy a cookie. There, you pay on the spot and leave the café. In this case, the café owner makes an on-spot cash transaction.
Now, suppose you visit the café and place an order for a birthday cake to be delivered after two days, and for which you will pay on delivery. This is an accrual. While the sale of the cake has been made, the café owner has not received the payment yet. Even intangible assets like goodwill come under accruals.
6. Learn how to prepare financial statements
You need to know how to decipher financial statements accurately to predict the financial health of a business. Before that, you need to know how to prepare these financial statements based on the information recorded in the general ledger. You need to understand how to use the trial balance to ensure that the total debits and credits in all accounts are equal.
After the accounts are adjusted, you need to be thorough of which entries goes into which part of the financial statements. You need to know what are contingency assets and how to calculate equity. The key here would be to practise drawing up balance sheets for various scenarios.
7. Know the generally accepted accounting principles
All accounting practices are carried out based on a set of principles that are designed to maintain transparency in all business transactions. This set of rules is known as GAAP. Now, the generally accepted rules differ from one country to another, one state to another, and one industry to another. So, based on the place you live in and the industry in which the company in question belongs, you need to be familiar with the prevalent GAAP.
Other than the specific rules, some of the broader principles that you must know about are:
- The Economic Entity Assumption (for a sole proprietorship)
- The Time Period Assumption
- The Cost Principle
- The Full Disclosure Principle
- The Going Concern Principle
- The Matching Principle
- The Revenue Recognition Principle
8. Follow the standards of the Financial Accounting Standards Board
You must be aware of the extensive rules and standards laid out by the FASB. These rules were formulated to make sure that all interested parties of a business have access to reliable and accurate financial information. These standards also ensure that all accountants work ethically and honestly. Read more about FASB’s standards here.
Other than the FASB’s rules, you must also be familiar with the generally accepted industrial practices. As an accountant, you will have certain expectations from other accountants working above, under or alongside you. The principles are – reliability, verifiability, objectivity, consistency and comparability.
Accounting is about numbers, but more so about concepts. One mistake in applying a fundamental concept, and the results can be miles apart from reality. So, make sure that you brush up your computational skills. Also, in this digitised age, you must know how to use Microsoft Excel in and out. And that does not mean just putting in values in rows and columns. You must know how to create charts and graphs and spreadsheets. Apart from Excel, you must also learn how to use software like Tally and Tax e-platforms.
At the end of the day, it all boils down to practice. The more you practise, the better you will get with time.
Author Bio: Millie Davis is a chartered accountant who also doubles as a guest lecturer in several colleges across Australia. She is also associated with the academic portal MyAssignmenthelp.com, where she extends finance and accounting assignment help. In her free time, Davis loves to read books and go on road trips.