Accounting records

Accounting records are the source documents, journal entries, and ledgers that describe the accounting transactions of a business.

Accounting records support the production of financial statements. They are to be retained for some years so that outside entities can inspect them and verify that the financial statements derived from them are correct. Auditors and taxing authorities are the entities most likely to inspect accounting records. The legal requirements to maintain accounting records need to be more consistent. At a minimum, records should be stored for as long as required to support an audit by the Internal Revenue Service. It could be more efficient to store them forever since the storage cost will eventually exceed any benefit from having them available [AccountingTools]. Accounting records are all the documents in preparing a company's financial statements. Certain regulatory bodies require companies to keep their accounting records for several years if they need to be reviewed. Accounting records are often reviewed for audits, compliance checks, or other business-related necessities. Types of accounting records include transactions, general ledgers, trial balances, journals, and financial statements. Accounting records generally come in two forms: single entry and double entry. By its name, a single entry is a much simpler method, which works better for smaller operations. The double-entry method is more complex and requires two entries, one credit, and one debit, for every transaction a business makes. The goal is to balance the books and account for the cash movement through an organization. This is primarily done in more giant corporations, which helps spot errors and potential fraud. The accounting records reviewed consist of transactions, journals, general ledgers, trial balances, and company financial statements [Investopedia].

Sources:

Accounting Records. Investopedia. Retrieved from: https://www.investopedia.com/terms/a/accounting-records.asp

Accounting records definition. AccountingTools. Retrieved from: https://www.accountingtools.com/articles/accounting-records