What is Accounting?
Accounting is a method of maintaining financial records pertaining to the business. The process involves summarizing, analyzing, and reporting these transactions to Agencies, Regulators, and Tax collection entities. The financial statements utilized in accounting are a concise summary of monetary transactions over an accounting period, summarizing a company's operations, financial position, and cash flows.
Requirements for Accounting:
In most cases, accountants use Generally Accepted Accounting Principles (GAAP) when preparing financial statements within the U.S. GAAP may be a set of standards and principles designed to enhance the comparability and consistency of monetary reporting across industries. Its standards are supported double-entry accounting, a way during which every accounting transaction is entered as both a debit and credit in two separate ledger accounts which will roll up into the record and earnings report.
In most other countries, a group of standards governed by the International Accounting Standards Board named the International Financial Reporting Standards (IFRS) is employed.