What is Accounting - Definition - Meaning - Examples - Explanation

Accounting is used in various business fields as it is the language through which events are expressed and communicated between two parties or among parties. In simple words, it is a means of recording data and then analyze that data into meaningful information in order to communicate it to the Users of Financial Statements.

Most of the Small, Medium, and Larger Companies including Banks and other Financial Institutions are using Computerized Accounting System operated through Different Accounting Software such as QuickBooks.

From the Definition given by the American Institute of Certified Public Accountants, we can say that:

“Accounting is the art of recording, classifying and summarizing in a significant manner and in terms of monetary value of transactions which are of a financial character, and the interpretation of the results”.

You Can Also Study, “What is the Modern Definition of Accounting”

So, in accounting, we record Business Transactions that are expressed in terms of monetary value. Then we classify these transactions i.e. we find out Different Types of Accounts involved in these one. Then, we summarize these information in the form of Trial Balance, Income Statement And Balance Sheet and other Financial Statements in order to interpret the results and communicate the true and fair view of financial information to the concerned parties at the end of accounting period.