What is accounting
Accounting is a financial business language, every item or transaction has the monetary value related to business come into the process of accounting. It is part of accountancy, Accountancy has a wide range of financial portion, and it also has auditing, taxation.
It is presenting the financial and economic position of the business in a standard format, by meeting the defined rules and regulation of operating system for the owner.
The objective of it is to know the financial position of the business. It helps and indicates where the business is, and support for how to increase the worth of business by taking corrective measures.
“Identifying, measuring, classification of what types, presenting to the relevant places and getting analysis from it is called accounting”.
“Accounting is an art of recording the monetary events of business by classifying their head of account, updating the required reports and measuring the financial position of business”
Note: Bookkeeping is part of accounting, the role of accountant start from bookkeeping to analysis the financial information.
Types or Branches of Accounting:
There are 3 types of accounting that are Financial Accounting, Cost Accounting and Managerial Accounting.
In financial accounting accountant role is to update the records and update the profit and loss and balance sheet of the organization.
In cost accounting, cost of the product is prepared for valuation of the product, analyzing from raw material to finished goods.
Managerial Accounting is concern reporting and analysis for management for decision making. Like estimates, budgeting and forecasting.