Introduction to Accounting: In the business field, especially if you are a business owner, understanding the basics of accounting will definitely give you advantages in managing key business functions, communicating with various stakeholders, and obtaining financial loans.
What is Accounting?
Accounting is the process of recording, classifying, analyzing, interpreting, and communicating financial information about a business or organization to various stakeholders.
To put it simply, the primary purpose of accounting is to provide accurate and timely financial information that helps stakeholders(e.g. investors, creditors, regulators, or management employees) make informed decisions about the organization’s operations and financial health.
This is what we, Bangkok Accounting Office(2009) Ltd., do over a decade. We help our clients to stay informed about their financial performance through bookkeeping and generating financial statements. Furthermore, we also oversee tax-related matters for our clients to stay legally compliant or be able to operate smoothly in Thailand.
A Range of Accounting Activities
- preparing financial statements,
- managing accounts payable and accounts receivable,
- tracking expenses and revenue,
- reconciling accounts, and
- managing tax obligations.
5 Primary Account Categories for Recording Transactions
Main Formula: Assets = Liabilities + Equity
- Assets = what the business owns.
- Liabilities = what the business owes.
- Equity = what belongs to the shareholders.
- Expenses/Expenditures = the costs of running a business.
- Income/Revenue = what the business earns.
Four Main Types of Financial Statements for SMEs in Thailand
These financial statements and reports provide valuable information to investors, creditors, and other stakeholders about a company’s financial health and performance.
- Income statement: Also known as a profit and loss statement, an income statement shows a company’s revenues, expenses, and net income (or loss) over a specific period. This statement provides information on a company’s ability to generate profits from its operations.
- Balance sheet: A balance sheet provides a snapshot of a company’s financial position at a specific point in time. It shows a company’s assets, liabilities, and equity. The balance sheet equation is Assets = Liabilities + Equity, which means that a company’s assets must equal its liabilities plus its equity.
- Statement of changes in equity: This statement shows changes in a company’s equity over a specific period, including changes in retained earnings and any dividends paid.
- Notes to the financial statements: These are additional disclosures that provide more detailed information on a company’s financial performance and position. The notes can include information on significant accounting policies, contingent liabilities, and related-party transactions.
- If you are in need of accounting or tax filing services, please feel free to contact us. We would be happy to assist you. – Bangkok Accounting Office(2009) Ltd.
