What is Accounting

At its core, accounting is more than just numbers; it’s a systematic process of recording, summarising, and analysing financial transactions. Imagine it as the storyteller of a company’s economic journey.


Key Objectives of Accounting

  • Recording Transactions: Every purchase, sale, and expense is meticulously documented. It’s like building the chapters of a financial novel, one transaction at a time.
  • Classification and Categorization: Like characters in a story, financial transactions are classified into categories – assets, liabilities, income, and expenses. This organisation forms the plot structure of the financial narrative.
  • Summarising Financial Data: To make sense of the story, accountants create financial statements. These documents – balance sheets, income statements, and cash flow statements – offer a condensed version of the financial novel, making it easier to comprehend.
  • Interpreting and Analysing: Just as a literary critic dissects a novel, accountants analyse financial data. They seek patterns, trends, and anomalies to understand the financial health of a business, providing valuable insights to decision-makers.

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