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Accounting Services in UAE

Accounting Services in UAE

Introduction

Accounting is a process of recording, measuring, and communicating information about financial transactions. Normally, the word “accounting and bookkeeping” is used for accounting of financial transactions. Accounting refers to keeping record of financial transactions of a business and giving true and fair view of financial information. Financial information is the final output of accounting. Financial information in accounting includes balance sheet, profit and loss account and cash flow statements.

Accounting means recording of series of transactions in terms of accounting language i.e. debits and credits. Some authors described accounting as a science, and some described as art of accomplishment of financial information. Normally, financial transactions are expenses, income, assets, and liabilities. Accounting helps user to understand the financial information of a business. While recording of transactions, financial transactions are booked as double entry system i.e. debits and credits.

A debit is an accounting entry that either increase an asset or expense account or decrease a liability or equity account. It is positioned to the left in an accounting entry. A credit is an accounting entry that either increases a liability or equity account or decreases an asset or expense account.

Golden rules of accounting

Accounting principles are essential rules and concepts that govern the accounting procedure. It guides the accounting process in recording, classifying, analyzing, verifying, and reporting of the financial information of the business. There are three basic principles of accounting in practice. It helps the user to translate the business transactions in accounting language i.e. Debits and credits. The important rules of accounting are given below:

  1. Personal account – debit the receiver and credit the giver
  2. Real account – debit what comes in and credit what goes out
  3. Nominal account – debit all the expenses and losses & credit all the income and gains

Accounting Principles

Accounting principles are the rules and guidelines that are used to prepare accounting records and reporting financial information. Accounting principles may be defined as those rules of procedures which are adopted by accountants, while preparing accounting records. The accounting principles can be classified into two categories:

The accounting principles can be classified into two categories

  1. Accounting Concepts
  2. Accounting Convention

1. Accounting Concepts

Accounting concepts are those necessary assumptions or ideas which are used to accounting practice and preparation of financial statements. The following are the list of important accounting concepts:

  • Entity Concept
  • Double Entry Concept
  • Accounting Period Concept
  • Going Concern Concept
  • Cost Concept
  • Matching Concept
  • Realization Concept
  • Accrual Concept
  • Value Concept

2. Accounting Conventions

It refers those customs, methods, and practices to be followed as a guideline for preparation of accounting records. The following accounting conventions are used in accounting practice:

  • Convention of Disclosure.
  • Convention of Conservatism.
  • Convention of Consistency.
  • Convention of Materiality.

Accounting firm near me

Here in Dubai, you can find so many accounting firms near you and your locations. Accounting firms are assisting clients in two ways. One is they are handling accounts on behalf of client and another is assisting and advising clients to maintain accounting.

Accounting firm in Dubai are not doing only accounting services; they are doing auditing and taxation advisory services. For auditing accounting firms shall get listing by the respective controlling bodies. For tax advisory services, accounting firms shall get listing as tax agent with Federal Tax Authority.

Accounting firms are normally consulting firms which provide business enterprise consultancy services in the field of accounting, auditing, taxation.

Accounting firms are also known for bookkeeping as the firms are doing accounting services on behalf of their clients. Doing accounting works for others are called as outsourcing of accounting.

Bookkeeping

Bookkeeping is defined as the art of recording the business transactions in the books of accounts.” A person who maintains and keeps a record of the business transactions and takes care of accounting activities is known as an Accountant. According to AICPA (American Institute of Certified Public Accountants) it is defined as “the art of recording, classifying, and interpreting in a significant manner and in terms of money, transactions and events which are in part at least of a financial character and interpreting the result thereof.”

Steps of accounting

The following are the steps of accounting that are used in the accounting services:

  1. Recording: recording all the transactions in a book for the purpose of future record or reference. It is also known as Journal.
  2. Classifying: all the recorded transactions in the books are classified and posted to the ledgers.
  3. Summarizing: all recorded transactions in the ledger will be summarized for the preparation of final accounts.
  4. Interpreting: interpreting refers to the explanation of results of accounts and financial status so that stakeholders of business can identify the future earnings, position to pay interest, liquidity, and profitability of the business.

Indeed, accounting is the language of business. The main objective of accounting is to obtain reasonable assurance in financial data that are in the interests of the business, its proprietors, and other stakeholders with the business information’s. Accounting is done to provide suitable information to the owners, government, financial institutions, and other controlling bodies.

28 Apr 2020

Madan Shah

Chartered Accountant

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