- What is accounting?
1- Introduction
2- Definitions
- Purposes of accounting
- Types of accounting
- Users of accounting Information
- Principles of accounting
It is a systematic process of identifying, recording, measuring, classifying, verifying, summarizing, interpreting and communicating financial information. It reveals profit or loss for a given period, and the value and nature of a firm's assets, liabilities and owners' equity.
Purpose of accounting?
The purpose of accounting is to accumulate and report on financial information about the performance, financial position, and cash flows of a business. This information is then used to reach decisions about how to manage the business, or invest in it, or lend money to it.
Once this financial information has been stored in the accounting records, it is usually compiled into financial statements, which include the following documents:
1) Income statement
2) Balance sheet
3) Statement of cash flows
4) Statement of retained earnings
5) Disclosures that accompany the financial statements