What is accounting?

Have you heard of the term "accounting"? If no, what is the first thing that comes to your head hearing it?

In this article, we will go through the accounting topic!

What is Accounting?

Accounting or accountancy is the measurement, processing, and communication of financial information about economic entities(In accounting, an economic entity is one of the assumptions made in generally accepted accounting principles).

There are five types of accounting which are:

Financial accounting - is concerned with the summary, analysis and reporting of financial transactions pertaining to a business.

Management accounting - also known as managerial accounting, managers use the provisions of accounting information in order to better inform themselves before they decide matters within their organizations, which aids their management and performance of control functions.

External auditing - systematic and independent examination of books, accounts, statutory records, documents and vouchers of an organization to ascertain how far the financial statements, as well as non-financial disclosures, present a true and fair view of the concern.

Tax accounting -  accounting for tax purposes in the United States.

Cost accounting - the process of recording, classifying, analyzing, summarizing, and allocating costs associated with a process, and then developing various courses of action to control the costs.

Accounting information systems(AIS) are designed to support accounting functions and related activities.

Standard-setters, accounting firms and professional bodies are facilitating Accounting.

Any business needs accounting, the company can't live without one. The businesses or accountants need to know all the laws.