WHAT IS ACCOUNTING?

Accounting, on the other hand, refers to the process of reporting and communicating financial information about an individual, business, or organization. Rather than making strategic financial decisions, accounting captures an accurate snapshot of a party’s financial position at a specific point in time—a practice that results in the information that finance activities are generally based upon.

The typical activities involved in accounting include recording transactions, collecting financial information, compiling reports, and analyzing and summarizing performance. The results often include thorough financial statements—including income statements, balance sheets, and cash flow statements—that are used to understand an organization’s position at a given time.