Accounting is a process of recording, classifying, and summarizing financial transactions to provide useful information for decision-making. The purpose of accounting is to provide accurate and timely financial information to stakeholders, such as investors, creditors, and management, to help them make informed decisions. Accounting is also essential for compliance with legal and regulatory requirements, such as tax laws and financial reporting standards. The process of accounting involves several steps, including: – Recording financial transactions – Classifying transactions into relevant categories – Summarizing financial information into financial statements These financial statements provide an overview of a company’s financial position, performance, and cash flows, which are crucial for understanding the company’s financial health and making informed business decisions.
What is accounting?
