What is accounting?

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• Accounting:-

• Accounting is the art of recording, classifying and summarising of the business transaction, then prepared result for the users

• Accounting system is a means of collecting, summarisig, analysing and reporting in monetary terms the information of business.

Functions of accounting:-

• Recording Function:- 
•                     Accounting keeps a systematic record of financial transactions. All transactions is essential for every business.

• Interpretative Function:- 
•                      This function includes analysis and interpretation of financial statements and reports for various user of accounting information

• Communicating the financial results:- 
•                          Accounting is often fererred to as the language of business. Accounting serves as a means of communication of various types of information to people, organisation, government etc.

• Facilitating Decision-making:- 
•                        Accounting facilitates rational decision-making by providing relevant data to the user of information.  
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• Protecting Business Assets:- 

•                            Accounting maintains  proper record the various assets and thus enables the management to exercise proper control over them with the help of various relevant information.  
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• Accounting Process :-
              The accounting process begins with identification of business transaction and ends with the preparation of “Financial Statement” or “Final Accounts”.
  
  
  Following steps are involves in the complete accounting process:
  1.      Identification of Financial Transactions,
  2.      Recording in the books of Journals,
  3.      Posting into ledgers,
  4.      Balancing of the accounts,
  5.      Preparation of Trial Balance,
  6.      Preparation of Financial Statements
  a.       Trading accounting,
  b.      Profit and Loss account,
  c.       Balance Sheet.
  7.      Analyzing and Interpreting.
          8.      Communicating the Results.