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Answer:

1. Differentiate Bookkeeping from Accounting

-- Bookkeeping focuses on recording and organising financial data while Accounting is the interpretation and presentation of that data to business owners and investors.

2. What are the types of Financial Statements?

-- Income Statement

➥ covers a range of time, which is a year for annual financial statements and a quarter for quarterly financial statements.

-- Cash Flow Statement

➥ measures how well a company generates cash to pay its debt obligations, fund its operating expenses, and fund investments.

-- Balance Sheet

➥provides an overview of a company's assets, liabilities, and shareholders' equity as a snapshot in time.

3. Normal balance of debit

-- In accounting, a normal balance refers to the debit or credit balance that's normally expected from a certain account. This concept is commonly used in the double-entry method of accounting. In a business asset account, for instance, the normal balance would consist of debits (i.e., money that's coming in).

-- example is in the picture

4. Formula of Net Income

-- Net Income = Total Revenue - Total Expense

5. Function of Accounting

-- Business Costs and Revenues

➥ An important function of accounting is to track business spending in relation to income. Just like managing your personal finances, accountants record expenses and payments to keep an accurate and up to date record of the company's funds.

-- Accounts Receivable

➥ Proper accounting ensures the company receives any payment they are due. An accountant tracks the profits of a business to ensure that revenue is continually flowing into their bank account.

-- Accounts Payable

➥ Accounts payable functions to pay the company's bills. They ensure the business pays for any money they owe and check that it is a legitimate charge. They also help set the due dates for payments so a company can best manage their own funds based on when money is coming in.

-- Payroll

➥ Accountants deduct employee wages from company funds for paychecks. They are also in charge of managing employee benefits if they are paid out of an employee's income. Accounting may help decide how employees are compensated for their work based on how wages affect the company's profits.

-- Financial Reporting

➥Accountants use digital systems to store and calculate data. If a company is publicly owned, it must also prepare both quarterly and yearly reports for shareholders detailing the assets, profits and losses of the business. Privately-owned companies also utilize fiscal reports like these to understand the financial resources of their firm.

-- Financial Analysis

➥ Companies use accounting to perform regular analysis of how well the business is performing. Either an outside consultant or internal personnel will look at the business as a whole to determine what functions can be made more efficient based on financial outcomes. They may suggest changes to employee departments or streamlined costs for production to reduce waste.

-- Taxes and Compliance

➥ A business must comply with government laws and standards from the Internal Revenue Service and the Securities and Exchange Commission, among other regulations. States also enforce monetary guidelines for businesses. Accounting is responsible for reporting the financial workings of the company and making sure they conform to all local and national laws and guidelines.

-- Budgeting

➥ Accounting is in charge of setting a company's budget. They use financial data from the past as well as projections for future income to compose annual budgets. Accountants also prepare budgets for individual departments and special projects within the company.