What is Accounting?

Accounting can be defined as the systematic and comprehensive recording of the financial transactions of a business. It is a methodology that involves the summarizing, analyzing and reporting of these transactions. Accounting is one of the basic functions for almost every business. It can be managed by a bookkeeper and accountant at small firms or by finance departments with large number of employees in larger companies. Accounting permits a company to evaluate the financial performance of its business and look at statistics like net profit, return to shareholders etc. The reports formulated by different streams of accounting like cost accounting, management accounting etc. are invaluable in assisting a management in taking informed decisions.