What do you mean by Accounting
Accounting is the process of recording, classifying, summarizing, and interpreting financial transactions of a business or organization to provide useful information for decision-making.
???? Definition (Simple)
Accounting is the language of business—it tells the financial story of an organization.
???? Key Functions of Accounting
-
Recording – Keeping track of all financial transactions (bookkeeping).
-
Classifying – Organizing data into categories (e.g., revenue, expenses, assets).
-
Summarizing – Creating financial statements like:
-
Balance Sheet
-
Income Statement (Profit & Loss)
-
Cash Flow Statement
-
-
Interpreting – Analyzing financial data to guide business decisions.
???? Who Uses Accounting?
-
Business owners (to assess profitability)
-
Managers (for budgeting and planning)
-
Investors (to evaluate returns)
-
Lenders (to assess creditworthiness)
-
Tax authorities (for compliance)
