Tuesday, November 19, 2013

What is accounting?

Accounting is a way of recording, Analyzing & Summering the financial transaction of a business Entity. Accounting is basically information and facts, and this information is published periodically in enterprise as a profit and loss statement, or an earnings statement. Accounting allows a company to analyze the financial performance of the business, and look at statistics such as net profit.

Accounting is defined by the American Institute of Certified Accountants (AICA) 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"
The American Accounting Association (AAA) defines accounting as "the process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information "