"introduction" accounting is a language that gives information

about the financial status of an organization. When we study accounting we are mainly learning

this specialized language. By learning this language we can communicate and understand

the financial position of any organization. Accounting allows a company to analyze the

financial performance of the business, and look at statistics such as net profit.

"definition"

Accounting is systematic process of identifying, recording, measuring, classifying, verifying,

summarizing, interpreting and communicating financial information. It reveals profit or

loss for a given accounting period, and the value of a firm's assets, liabilities and

owners' equity. The American Accounting Association defines

accounting as "the process of identifying, measuring and communicating economic information

to permit informed judgements and decisions by users of the information."

"THREE MAIN PARTS" Financial Accounting

One part of accounting focuses on presenting the information in the form of general-purpose

financial statements (balance sheet, income statement, etc.) to people outside of the

company. These external reports must be prepared in accordance with generally accepted accounting

principles often referred to as GAAP or US GAAP. This part of accounting is referred

to as financial accounting.

This is the information that is used by managers, shareholders, banks, creditors, the public

etc. to make decisions involving the organization and its operations. Shareholders want information

about what their investment is worth and whether they should buy or sell shares. This

type of information would be very difficult to extract if every company used a different

system for recording their financial position. Financial accounting information is subject

to a set of ground rules that dictate how the information is reported and this ensures

uniformity.

Accounting also provide company's management with the information in shape of reports it

needs to keep the business financially healthy. These analyses and reports are not distributed

outside of the company, This area of accounting is known as management accounting.

Another part of accounting involves compliance with government regulations pertaining to

income tax reporting.

"MODERN ACCOUNTING"

Today much of the recording, storing, and sorting aspects of accounting have been automated

as a result of the advances in computer technology.The use of computers is making these transactions

much easier to post and work for the company. Reports of any kind can be produced with the

push of a button and a quick snapshot of required information is revealed.