The information on how a business becomes successful is measured through its income statement. This part of the financial statement shows the increase or decrease of owner's equity during a given period.

Accounts payable is found in the credit side of a company's balance sheet statement. It represents short - term liabilities. Differentiated from mortgage payables, accounts payable is a debt to be paid in no more than one year.

To a business owner, the most important documents he wants to lay his eyes on are the financial statements. These documents are reports - on the performance and the result of business operations.

Sometimes, a business owner would be in a quandary as to what a balance sheet means. To a business proprietor, his main concern is whether or not the firm is having profit or incurring losses.

Bookkeeping should never be equated to accounting because bookkeeping is merely a part of accounting. When accounting became computerized, there were apprehensions about the role of the bookkeepers.

Accounts receivable from the accounting scenario has a deep meaning and complicated undertaking. Accounts receivable is an asset of the business so the collections of these will be greatly affecting the company's cash flow.

Business success and failure can easily be gauged - through the financial statements. These accounting documents have to be prepared regularly, as much as possible - daily.

To start a business requires expertise and herculean efforts. It is not only enough capital investments. Starting a business does not mean you can have a corporate enterprise by just having millions of funds.

The role of accountants does not cease on the preparation of financial documents. They also perform the task of making sure the company complies with all government taxation rules.

Accounting is defined by the AICPA as "The art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character, and interpreting the results thereof.