Category: Accounting

Accounting is the systematic process of recording, summarizing, and reporting financial transactions of an organization to provide a clear view of its financial health. It is often called the “language of business” because it communicates vital information to stakeholders, such as managers, investors, and regulators, to make informed decisions. The two primary areas of accounting are Financial Accounting, which focuses on the preparation of financial statements (income statement, balance sheet, and cash flow statement) according to standardized guidelines, and Managerial Accounting, which focuses on providing internal management with the data necessary to make operational decisions. Accounting also includes Tax Accounting, which deals with the preparation of tax returns and tax payments, and Auditing, which involves examining financial records to ensure accuracy and compliance with laws. In a globalized world, accountants must also deal with international accounting standards and cross-border financial regulations.