In the What is Accounting? section, we will examine the following topics:
Accounting is the process of recording, organizing and summarizing the financial activity of a business. Traditionally, this process has been regarded as cyclical in nature, divided into distinct phases:
Recording each financial transaction that occurs in the course of starting up and operating a business. This phase is commonly known as bookkeeping.
Organizing transactions into groups of related data.
Summarizing data in standard formats meaningful to others. This phase involves the preparation of financial statements such as a balance sheet and an income statement.
The traditional accounting cycle, however, is not intrinsic to the accounting process. On the contrary, it has been imposed in an attempt to capture the essence of an entity that is always changing. Transactions are ongoing and each transaction changes the financial picture of a business.
In the era of pen and paper, the calculations required to follow each transaction to a financial statement presented a formidable task. Therefore, the transactions were simply recorded and the chore of preparing financial statements was undertaken periodically.
With the computer technology that is available today, "flowing" transaction data directly to the financial statements is a matter of course. This can be done automatically when the transactions are recorded electronically. No accounting software program makes this more apparent than NewViews.
Some other accounting software programs "hide" your transaction data after it is entered, until such time as it is issued within highly structured financial reports.
NewViews, on the other hand, provides direct access to your data at all times, which can be examined in a variety of formats. As such, NewViews is a natural extension of traditional manual accounting methods, enhanced by powerful microcomputer software technology.
This technology: