accounting

  

Definition

Practice and body of knowledge concerned primarily with

  1. methods for recording transactions,
  2. keeping financial records,
  3. performing internal audits,
  4. reporting and analyzing financial information to the management, and
  5. advising on taxation matters.

It is a systematic process of identifying, recording, measuring, classifying, verifying, summarizing, interpreting and communicating financial information. It reveals profit or loss for a given period, and the value and nature of a firm's assets, liabilities and owners' equity.

Accounting provides information on the

  1. resources available to a firm,
  2. the means employed to finance those resources, and
  3. the results achieved through their use.

See also: List of Key Accounting Terms and Definitions at InvestorGuide.com.


Use accounting in a sentence

  • When the accounting had been done, it was found that a small amount of money was missing, probably due to a faulty ledger entry somewhere along the line.

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  • It was very difficult for the library to keep an accurate accounting of all their electronic books and media because the software was so complicated.

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  • The accounting at the firm was so mismanaged that the threat of bankruptcy was suddenly becoming a very real possibility.

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Notable Quotes

  • One Perspective on Book-Keeping by Double Entry
    "The system of book-keeping by double entry is, perhaps, the most beautiful one in the wide domain of literature or science. Were it less common, it would be the admiration of the learned world."
    - Edwin T. Freedley

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