Accounting is defined by the AICPA 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. Well definition of American Accounting Association define accounting are the process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information!

Accounting is thousands of years old; the earliest accounting records, which date back more than 7,000 years, were found in the Middle East. The people of that time relied on primitive accounting methods to record the growth of crops and herds. Accounting evolved, improving over the years and advancing as business advanced.

Today, accounting is called “the language of business” because it is the vehicle for reporting financial information about a business entity to many different groups of people. Accounting that concentrates on reporting to people inside the business entity is called management accounting and is used to provide information to employees, managers, owner-managers and auditors. Accounting that provides information to people outside the business entity is called financial accounting and provides information to present and potential shareholders, creditors, To make the financial statements more understandable, there are some common rules known as generally accepted accounting principles (GAAP). All of the accounting rules are based on some underlying or basic accounting principles such as cost, matching, economic entity, going concern, revenue recognition, full disclosure, materiality, conservatism, and others. Accountants also strive for the financial reporting to be relevant and reliable

The accounting system is known as double-entry, because every transaction will involve at least two accounts in a company’s general ledger. The accounting system requires that at least one account be debited (amount entered on the left side) and one account be credited (amount entered on the right side).

The output of the accounting system includes three main financial statements: balance sheet, income statement, and cash flow statement. The balance sheet reports the financial position of a company at a moment in time. The balance sheet reports a company’s assets, liabilities, and stockholders’ equity. The income statement reports the company’s profitability Kamagra Soft during a period of time.

As we have said in our introductory definition, accounting is essentially an “information process” that serves several purposes: Providing a record of assets owned, amounts owed to others and monies invested; Providing reports showing the financial position of an organization and the profitability of its operations Helps management actually manage the organization ; Provides a way of measuring an organization’s effectiveness; Helps stakeholders monitor an organizations Levitra activities and performance; Enables potential investors or finders to evaluate an organization and make decisions.

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