Accounting Services in Kansas City MO
Accounting terms such as assets, liabilities, and equity can be overwhelming, particularly for small business owners. It's critical, though, to understand these accounting concepts and be able to manage them effectively for the success of your enterprise.
Our accounting services in Kansas City are here to help you. Whether you're just starting with your business or hoping to scale it up, we ensure managing your books of account doesn't have to be difficult for you. AssetsAssets are things that your business owns and uses to create value. When building wealth, they can also work as a tool to increase your net worth and achieve growth. Fortunately, we can help you to monitor all your company's assets, whether long-term or short-term, tangible or intangible. We also help determine their fair market value and depreciation rate, which are essential when filing your tax return.
LiabilitiesLiabilities are obligations that your business owes to others. It includes debts, payables, and other monetary responsibilities. Managing liabilities can be tricky as they affect your company's balance sheet. We can help you identify different types of liabilities, such as accounts payable, wages payable, interest payable, taxes payable, and accrued expenses. We also help calculate the interest on loans or credit balances and create a payment schedule that won't hurt your cash flow.
EquityEquity refers to the company's ownership, including the owner's contributions and retained earnings. It is essential to keep your equity balance accurate at all times, as errors can lead to under or overstatements of your business's finances. We can help you with accounting for equity by creating a separate account for each owner's contributions, tracking company profits and losses, and simplifying the process of distributing dividends. By doing so, you can have a clear view of how much equity your business has and make informed decisions regarding your reinvestments.
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In conclusion, assets, liabilities, and equity are essential accounting elements that your business needs to thrive. Mismanaging these concepts can lead to financial disaster. However, with our accounting services in Kansas City, MO, you don't have to worry. We can help you with financial planning, keep your books accurate and up-to-date, and provide financial advice to take your business tax account to the next level. Contact us today to see how we can simplify the accounting process for your enterprise.
Understanding the Different Types of Accounting
Accounting is a crucial aspect of any business, and it is essential to understand the different types of accounting to make informed decisions. Two primary types of accounting are financial accounting and managerial accounting. Financial accounting deals with preparing and presenting financial statements to external users like investors, creditors, and regulators. On the other hand, managerial accounting deals with providing information to internal users like managers, executives, and employees.
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Financial Accounting
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Managerial Accounting
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Financial accounting is a type of accounting that aims to provide accurate information about the financial position and performance of a company to external users. It involves recording, classifying, summarizing, and presenting financial transactions in the form of financial statements. These financial statements are prepared according to Generally Accepted Accounting Principles (GAAP) and include the Balance Sheet, Income Statement, Cash Flow Statement, and Statement of Retained Earnings.
Principles and Standards (Generally Accepted Accounting Principles - GAAP)
The principles and standards of financial accounting are established by GAAP, which provides a set of guidelines for preparing financial statements. GAAP ensures that financial statements are consistent, comparable, and reliable, making it easier for external users to analyze and understand them.
Financial Statements
The financial statements of a company provide information about its financial position and performance. These statements include:
Principles and Standards (Generally Accepted Accounting Principles - GAAP)
The principles and standards of financial accounting are established by GAAP, which provides a set of guidelines for preparing financial statements. GAAP ensures that financial statements are consistent, comparable, and reliable, making it easier for external users to analyze and understand them.
Financial Statements
The financial statements of a company provide information about its financial position and performance. These statements include:
- Balance Sheet: This statement shows a company's assets, liabilities, and equity at a specific point in time.
- Income Statement: This statement shows a company's revenue, expenses, and net income over a specific period.
- Cash Flow Statement: This statement shows a company's inflow and outflow of cash over a specific period.
- Statement of Retained Earnings: This statement shows changes in a company's retained earnings over a specific period.
Managerial accounting is a type of accounting that aims to provide information to internal users to help them make informed decisions. It involves collecting, analyzing, and interpreting financial data to support internal decision-making processes.
Role in Internal Decision-making
The role of managerial accounting in internal decision-making can be seen in various areas like product pricing, cost control, budgeting, and forecasting. For example, a company can use managerial accounting to determine the cost of producing a product and decide on its pricing strategy.
Cost Accounting
Cost accounting is a branch of managerial accounting that deals with identifying, measuring, and controlling costs. It involves analyzing the cost of producing a product or service and identifying areas where the company can reduce costs.
Budgeting and Forecasting
Managerial accounting also plays a vital role in budgeting and forecasting. It helps companies to set realistic financial goals based on historical data, industry trends, and other factors.
Performance Analysis
Finally, managerial accounting makes it possible to analyze and assess a company's performance and take corrective action where necessary. This analysis can be done using various techniques such as variance analysis and ratio analysis.
Role in Internal Decision-making
The role of managerial accounting in internal decision-making can be seen in various areas like product pricing, cost control, budgeting, and forecasting. For example, a company can use managerial accounting to determine the cost of producing a product and decide on its pricing strategy.
Cost Accounting
Cost accounting is a branch of managerial accounting that deals with identifying, measuring, and controlling costs. It involves analyzing the cost of producing a product or service and identifying areas where the company can reduce costs.
Budgeting and Forecasting
Managerial accounting also plays a vital role in budgeting and forecasting. It helps companies to set realistic financial goals based on historical data, industry trends, and other factors.
Performance Analysis
Finally, managerial accounting makes it possible to analyze and assess a company's performance and take corrective action where necessary. This analysis can be done using various techniques such as variance analysis and ratio analysis.
In conclusion, financial and managerial accounting are two types of accounting that serve different purposes, audiences, and outcomes. Financial accounting aims to provide information to external users, while managerial accounting aims to provide information to internal users. Both types of accounting are essential for a company's success, and it is crucial to understand their purpose and scope to make informed decisions. By keeping a clear understanding of financial and managerial accounting, companies in Kansas City, MO can make informed decisions, handle payroll management efficiently, assess their performance, and ultimately achieve their business goals.
The Nine Stages of Accounting
If you are a business owner in Kansas City, you know how essential accounting services are for your company. Accounting is more than just crunching numbers; it is the backbone of any business. Here at Kansas City Accountants, we take the cycle of accounting seriously. From identifying and analyzing transactions to preparing financial statements, we will give you an insight into the entire accounting process.
I. Identification and Analysis of Transactions
We work with our clients to understand their business operations and identify all their transactions, including sales, purchases, and expenses. We also analyze each transaction to ensure that it is recorded correctly, and the data is accurate. II. Journalizing Transactions
Once transactions are identified and analyzed, the next step in our accounting services is journalizing. During this stage, we record each transaction in a journal. A journal is a chronological record of all business transactions, including the date, the accounts involved, and the amounts. Maintaining a journal allows us to keep track of all transactions and ensures that nothing is missed. III. Posting to Ledgers
After journalizing, we move on to posting to ledgers. The ledger is a record of all accounts used by the business, and each ledger account will show the balance of that account. We post each transaction to the appropriate ledger account to ensure the record is up-to-date. Posting to ledgers helps us keep track of individual accounts, making it easier to prepare financial statements. IV. Preparing Trial Balance
A trial balance is a summary of all ledger balances and checks that the two sides of each transaction are equal. Preparing a trial balance ensures that all transactions are recorded correctly and helps identify any errors that need to be corrected. V. Adjusting Entries
After preparing a trial balance, we move on to the adjusting entries stage of our accounting services. Adjusting entries are used to record transactions that have not been recorded at the end of the accounting period, such as accrued expenses and revenue. Adjusting entries ensure that the financial statements are accurate and reflect the current financial position of the business. |
VI. Preparing Adjusted Trial Balance
Once adjusting entries have been made, we prepare an adjusted trial balance to reflect the changes. An adjusted trial balance includes all adjusting entries and ensures that the two sides of each transaction are equal. This stage is crucial in our accounting services as it is the basis for preparing the financial statements. VII. Financial Statements Preparation
Financial statements summarize the financial position of the business and include the balance sheet, income statement, and cash flow statement. Preparing financial statements is a critical stage in our accounting services as they provide insights into the financial health of the business. VIII. Closing Entries
Once the financial statements have been prepared, we move on to the closing entries stage of our accounting services. Closing entries are used to transfer temporary account balances to permanent accounts and ensure that the income and expense accounts have zero balances at the end of the accounting period. This stage helps maintain accurate financial records and prepares the books for the next accounting period. IX. Post-Closing Trial Balance
The final stage of our accounting services is preparing a post-closing trial balance. This stage ensures that all closing entries have been recorded correctly, and all temporary accounts have been closed. The post-closing trial balance provides a clean slate for the next accounting period and ensures that the financial records accurately reflect the business's current financial position. |
In conclusion, our accounting services in Kansas City go through nine stages, from identifying and analyzing transactions to preparing a post-closing trial balance. Each stage is vital in ensuring accurate financial records and providing insights into the business's financial position. Partnering with us for your accounting services ensures that your financial records are accurate, and you have the necessary information to make informed decisions for your business.