Question

whay is accounting

Answer 1

Accounting is a language of business in which we have two basic terms: 'Debit' and 'Credit'.

Accounting is a process of recording financial transactions pertaining to a business in monetary terms in an organized manner in the books of accounts and this recording is done in terms of 'Debit' and 'Credit'.After recording the process continues with classifying and summarizing the recorded data into some useful information which is used for calculation of Profit or Loss of the business activities and it's Financial Strength. Which are presented in form of financial Statements.

The objective of every business is to earn profit and the process of accounting helps in measuring the profit generated by the business during a period. After Profits are calculated, these are analyzed and reported to the various stakeholders of the business which helps them in making their decision with respect to the particular business.

Accounting, based on its nature, is divided in different types: Financial Accounting helps in assessing Profit and financial position and Cost Accounting is used for cost ascertainment, Management Accounting is done for making decisions of the business and Taxation Accounting helps in calculations of taxes.