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Define accounting. name the objective of accounting Related: Branches...
Accounting is the process of recording financial transactions pertaining to a business. The accounting process includes summarizing, analyzing and reporting these transactions to oversight agencies, regulators and tax collection entities.
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Define accounting. name the objective of accounting Related: Branches...
Definition of Accounting

Accounting is the process of recording, classifying, analyzing, interpreting, and communicating financial information about a business entity to stakeholders. It involves keeping track of a business's financial transactions, preparing financial statements, and providing financial information to decision-makers.


Objective of Accounting

The primary objective of accounting is to provide accurate and reliable financial information to stakeholders, including investors, creditors, management, and government agencies. The information provided by accounting helps stakeholders make informed decisions about the financial health and future prospects of a business entity. Accounting also helps in:


  • Tracking the financial performance of a business entity

  • Managing cash flow and ensuring financial stability

  • Complying with legal and regulatory requirements

  • Assessing the value of a business entity for investment or acquisition

  • Assisting in tax planning and compliance



Branches(Sub-Disciplines) of Accounting

Accounting is a broad field that encompasses various sub-disciplines, each with its own set of principles, practices, and techniques. The major branches of accounting include:


  • Financial Accounting: Involves recording, classifying, and summarizing financial transactions to prepare financial statements for external stakeholders.

  • Managerial Accounting: Involves providing financial information to internal stakeholders, such as management, to aid in decision-making and control.

  • Tax Accounting: Involves preparing and filing tax returns for individuals and businesses to comply with tax laws.

  • Auditing: Involves examining financial records and statements to ensure accuracy and compliance with accounting standards and regulations.

  • Cost Accounting: Involves determining the cost of producing goods or services to aid in pricing decisions and cost control.

  • Forensic Accounting: Involves investigating financial fraud and other financial crimes.

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Define accounting. name the objective of accounting Related: Branches(Sub-Disciplines) of Accounting?
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