What Is Accounting | Learn What The Accounting Is All About - YouTube

hello and welcome today we are going to learn What is accounting?

"introduction" accounting is a language that gives information

about the financial status of an organization.

When we study accounting we are mainly learning this specialized language.

By learning this language we can communicate and understand the financial position of any

organization.

Accounting allows a company to analyze the financial performance of the business, and

look at statistics such as net profit.

"definition"

Accounting is systematic process of identifying, recording, measuring, classifying, verifying,

summarizing, interpreting and communicating financial information.

It reveals profit or loss for a given accounting period, and the value of a firm's assets,

liabilities and owners' equity.

The American Accounting Association defines accounting as "the process of identifying,

measuring and communicating economic information to permit informed judgements and decisions

by users of the information."

"THREE MAIN PARTS" Financial Accounting

One part of accounting focuses on presenting the information in the form of general-purpose

financial statements (balance sheet, income statement, etc.) to people outside of the

company.

These external reports must be prepared in accordance with generally accepted accounting

principles often referred to as GAAP or US GAAP.

This part of accounting is referred to as financial accounting.

This is the information that is used by managers, shareholders, banks, creditors, the public

etc. to make decisions involving the organization and its operations.

Shareholders want information about what their investment is worth and

whether they should buy or sell shares.

This type of information would be very difficult to extract if every company used a different

system for recording their financial position.

Financial accounting information is subject to a set of ground rules that dictate how

the information is reported and this ensures uniformity.

Accounting also provide company's management with the information in shape of reports it

needs to keep the business financially healthy.

These analyses and reports are not distributed outside of the company, This area of accounting

is known as management accounting.

Another part of accounting involves compliance with government regulations pertaining to

income tax reporting.

"MODERN ACCOUNTING"

Today much of the recording, storing, and sorting aspects of accounting have been automated

as a result of the advances in computer technology.The use of computers is making these transactions

much easier to post and work for the company.

Reports of any kind can be produced with the push of a button and a quick snapshot of required

information is revealed.