what is a accounting
Answers
Answer:
Accounting or accountancy is the measurement, processing, and communication of financial and non financial information about economic entities such as businesses and corporations.
Answer:
Accounting is a science and is often called as the language of business, where ,business is a continuous human economic activity aiming at making profit by producing or buying and selling goods or providing services for a price.
Business consists of series of transactions. A transaction maybe described as an event that occurs relating to business and it brings about change in the financial position of the business. These business transactions are to be identified, measured, classified, recorded, summarized, analysed, interpreted and communicated to interested parties so as to serve a basis for decision making. Therefore, the entire process follows a sequence, that is being presented in this subject.
An accounting cycle is a complete sequence of accounting process that begins with the recording of business transactions and ends with the preparation of financial statements.
These include journal, ledger, trial balance and financial statements such as ,trading account, profit and Loss account and balance sheet.
Accounting activities starts with identification and recording of transactions in the journal in a chronological order, later they are to be posted to their respective accounts in the ledger. From the ledger balances, a trial balance is extracted, on the basis of which financial statements are prepared. The balances of various assets and liabilities at the end of each financial year will be carried forward to the next year with the help of a journal entry called opening entry. Therefore, the whole process follows a round shape of a wheel called " accounting cycle " .