What is Business Accounting for Small Business Owners?

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What is Business Accounting for Small Business
Owners?

• Unicorn Accountants
• 02080640454
• www.unicornaccountants.co.uk
• 5 Merchant Square London W2 1AYdream_at_unicornacco
  untants.co.uk

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Introduction
If you are new to accounting for small business
owners, you must know the three forms of
accounting reports - balance sheets, income
statements, and cash flows. Within the context of
a balance sheet, assets, liabilities, and capital
play pivotal roles. Essential Accounting
Principles Every Small Business Owner Must Know
1. The Accrual Basis vs. Cash Basis Accounting

• Accrual Basis When revenue or expenses are
  incurred or generated.
• Cash Basis Revenues are only recorded under the
  cash basis of accounting when cash is received.

Blog source - Mastering Accounting Essentials A
Comprehensive Guide for Small Business Owners
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2. The Accounting Equation

• The accounting equation is a method that tracks
  financial transactions. It states -
• Assets Liabilities Equity
• Assets These are what the business owns.
• Liabilities These represent what the business
  owes.
• Equity Equity represents the remaining ownership
  stake in the entity's assets once all liabilities
  have been subtracted.

3. Revenue Recognition
Revenue must be recorded when the products or
services have been delivered, and payment is
expected.
Blog source - Mastering Accounting Essentials A
Comprehensive Guide for Small Business Owners
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4. Expenses Recognition
Expenses should be recognised when they are
incurred.
5. Double Entry Book-Keeping
Each financial transaction in a double-entry
bookkeeping system impacts two accounts, one of
which is debited, and the other is credited.
6. Chart of Accounts
A list of all the accounts you use to monitor the
financial activities.
7. Cash Flow Management
Helps you make informed decisions about spending,
borrowing, or investing.
Blog source - Mastering Accounting Essentials A
Comprehensive Guide for Small Business Owners
5
8. Financial Statements
Small business owners should be familiar with
three essential financial statements Income
Statement Summary of the expenses, revenues, and
net income. Balance Sheet Business's financial
position including equity, liabilities, and
assets.  Cash Flow Statement Cash movement into
and out of the business.
9. Financial Ratios
Financial ratios provide insight into the
efficiency and stability of your company's
finances.
10. Tax Compliance
Small businesses in London must adhere to tax
rules and regulations.
11. Accounting Software
Investing in accounting software can streamline
the accounting processes and improve accuracy.
Blog source - Mastering Accounting Essentials A
Comprehensive Guide for Small Business Owners
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12. Internal Controls
Protects the business against fraud and errors.
13. Professional Advice
They are qualified to help you with tax planning,
provide insightful advice, and ensure accuracy of
financial records.
How Can Unicorn Accountants Help You?
Our team comprises experienced accountants and
financial advisors, ready to aid you in a wide
range of areas, including tax planning,
compliance, financial reporting, and
analysis.  Reach out to us today!
Blog source - Mastering Accounting Essentials A
Comprehensive Guide for Small Business Owners
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THANK YOU!

Unicorn Accountants
dream_at_unicornaccountants.co.uk
02080640454
www.unicornaccountants.co.uk
5 Merchant Square London W2 1AY - United Kingdom
Blog source - Mastering Accounting Essentials A
Comprehensive Guide for Small Business Owners