Financial accounting


Financial accounting is a legal obligation for each entrepreneur, as well as an important source and support for business decisions.
Although (too) often for many entrepreneurs accounting represents only „the necessary evil“ (and a costly one, too), more often do they become aware of the importance of accounting for business projects, as well as a source of information for proper business growth and movement of current economic initiatives.
Financial accounting encompasses a complex monitoring procedure of all developments within the company, even the smallest, that can be monetarily expressed.
The result of processing the gathered data through accounting are the reports, which either show a justification of risks as well as  capital invested into a business venture through a positive business result, or an alarm, urging the management’s caution and the need of taking corrective actions when a business is not profitable.
Financial accounting consists of business book keeping: logs, ledgers and auxiliary books (different analytical records) for profit tax payers (companies) and book of revenues and expenses for income tax payers (crafts and freelance business).
Accounting for non–profit organisations, budgets and budget beneficiaries require separate financial accounting systems.
The most important provisions on financial accounting are:
-    Accounting Act (Official Gazette 109/07)
-    Auditing Act (Official Gazette 146/05)
-    Companies Act (Official Gazette 111/93 to 107/07)
-    Profit Tax Act (Official Gazette 177/04 to 146/08)
-    Income Tax Act (Official Gazette 177/04 to 78/08)
-    Value Added Tax Act (Official Gazette 47/95 to 76/07)
-    Regulation on accounting of non–profit organisations (Official Gazette 10/08 and 7/09)
-    State Budget Act (Official gazette 96/03)

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