Understanding Accounting

Posted by Imam Larh on Wednesday, 14 February 2018

Understanding Accounting

According to the American Institute of Certified Public Accountants (AICPA), accounting is a record-keeping and compaction of the nonprofitGenesis financial transactions with the proper way (Sepik) in the form of a unit of money and interpretation of the results of that process. Accounting, also known as the "language of business". 


Accounting aims to prepare accurate financial reports in order to be utilized by managers, policymakers, and other interested parties, such as interns shares, creditors, or owners. The daily record-keeping involved in this process is known as the bookkeeper.

From the accounting sense, it can be concluded that the accounting activities include the following:

Recording

The recording is a process of writing a corporate financial transaction that occurs in the document (evidence of transactions such as notes, kuintansi, checks, and more)into the diary (Journal) is available on the company carefully and chronologically.

Classifying

Categorization is a grouping of financial transactions, these activities into estimates of the big book.

Read Also: Accounting Overview

Summarizing

Compaction is activities to simplify the financial transactions which are already classified to the ledger in balance sheet balances.

Reporting

Reporting is the activity of putting together an entire transaction in the form of financial statements consisting of profit/loss report, report changes in capital, balance sheet, cash flow statement, and notes to financial statements.

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