Reporting currency

From the emergence of financial accounting in the world, currency is the root of accounting. Whether it is in ancient times or modern times, money is the measurement unit to standardize accounting behavior, commonly known as accounting currency, which is usually the currency that is used most in the area where the bookkeeper works. The accounting currency is different from country to country and region to region, which usually depends on the country where it is located. In addition to the national currency, there are also other currencies as a reference, which is called the functional currency.

The functional currency is a currency that is used interchangeably with the legal currency to settle payments and is adversely affected by the rate of exchange between the business’s functional currency and its local currency. For example, the British pound is the legal tender in the UK, and the foreign exchange market is based on the euro. In the British market, most people would choose the European Union as the functional currency for their business transactions. In other words, the business is using the euro as a means of payment.

For multinational companies and international accounting organizations, the accounting currency is especially important. They need to ensure that their accounting records are clear, accurate and consistent across all countries. Therefore, the international accounting organization requires that the functional currency should be a common currency. This unified currency is usually determined by the management of the enterprise or the governments of different countries, based on the requirements of international accounting organizations. Generally speaking, it is the local currency of the headquarters of the company that is used as the functional currency.

The unified accounting currency is the base currency of the companys overall accounting records. Its purpose is to unify the companys accounting records in different countries, so that all the data can be compared and easily refuted, and to accurately reflect the income, expenses and other accounting data. Therefore, a unified accounting currency is very important for improving the accuracy of financial statements.

In conclusion, the accounting currency is the common measurement used by the accountant for transactions in different countries. Stable exchange rates for the currency are essential for achieving consistency in the records. Therefore, it is important for multinational companies or international accounting centers to select an appropriate currency as the base currency of their accounting records, so that the unified currency can provide a solid foundation for accurate and consistent accounting records.

介绍

A journal is a book where businesses and individuals record financial transactions on a regular basis. A ledger is a book where businesses and individuals record their financial activity which is relevant to a particular asset or liability. The concept of a journal and ledger is the same but they are distinct in their purpose.

A journal is used to record the transactions at the time of the original transaction. This record is used to support the original transaction. The journal lists out the relevant information about the transaction, such as the date and amount of the transaction, the accounts to be debited and credited and any other information that is pertinent to the transaction. It is also used for itemizing expenses, such as supplies and salaries, as well as income and deposits.

A ledger on the other hand is a book which is used for recording all the related data. This is used to track the financial activity of a particular asset or liability, such as accounts receivable, accounts payable, wages, taxes, and capital. This is used to give a complete view of the financial activities of the company or individual. It is also used to reconcile the original transactions to ensure that all the numbers are in order.

The ledger also helps to track the money that comes in and goes out by providing a summary of all the transactions that take place in a particular period of time, such as the month, quarter or year. The ledger is also the most important book in a company’s or individual’s books of account as it serves as the chief means of determining the financial health of the company or individual.

The journal and ledger should be kept in the same currency - referred to as the base currency. Keeping the records updated and accurate helps ensure the accuracy of financial statements and eliminates the need for frequent conversions. To ensure appropriate and proper accounting, it is essential that the journal and ledger be updated regularly, with any adjustments made as necessary.