Can accounts be handled well without a proper understanding of debits (Dr) and credits (Cr)? No way. Proper financial recording, analysis, and decision making requires a basic knowledge of these essential accounting terms.
A person lacking this knowledge would be limited to entering data, without the ability to interpret, analyze, or provide meaningful conclusions from financial data. This would limit them to a data entry clerk, as opposed to a trained accountant.
Accountants play a decisive role in guiding business decisions, interpreting trends, and enhancing financial performance. To fulfill this role, they must possess a personal understanding of accounting principles, including the subtlety of debits and credits.
Without it, accountants would be unable to:
- Accurately record and classify financial transactions
- Prepare reliable financial statements and reports
- Interpret financial data to identify opportunities for improvement
- Provide wise counsel on business decisions
Fundamentally, a good grasp of debits and credits is the basis upon which there can be effective accounting. It enables accountants to move beyond mere data entry and provide actionable intelligence that drives business success
BY: VIOLET. N. WAGUGWE CPA
