In accounting and notation, two words are combined with writing in accounting and writing means notation. The writing of an event sequence into digits is called accounting.
The act of transcribing events into numbers to achieve a specific purpose is called accounting. Here events mean all actions in which money is exchanged.
In simple terms, accounting refers to the orderly accounting of financial transactions, classifying them, preparing summaries and presenting them in such a way that they can be analyzed and interpreted. Summary in accounting refers to making a table and the basis of analysis and interpretation are the final accounts, under which the business account, profit-loss account, and account/position statement or balance sheet are prepared.
Examples
In business, a lot of items are bought, often sold. Spending also continues to be made; income is also kept, how much is spent, how much income is spent on whom and how much profit or loss is made, to gain all these information, the businessman writes down the events in his own lives. This writing process is called accounting. Hence accounting is the accounting of the financial transactions of the business.
The following three functions are included in the accounting initialization:
Recording:The act of transcribing the transaction for the first time is called recording. The inscription is called Roznamcha i.e. Journal.
Classification:The action of dividing the recorded items into separate parts is called classification. The classification is also called Ledger.
Summarising:The verb to write classified items in one place is called summarization. An abbreviation is also called Trial balance.
With the increase in the size of business in the modern era, the complexities of business have also increased. Business is related to many customers, suppliers and employees and hence hundreds, thousands or millions of transactions take place in the business world. All transactions take place. It is difficult and impossible to memorize all transactions linearly. We want to know the profit of the business and also want to know how much his assets are, his liabilities or liabilities, how much is his capital, etc. Accounting for all these things is required.
Accounting has the following characteristics:
Accounting is the art of writing and classifying business deals.
Information of analysis and interpretation should be communicated to those who have to make conclusions or conclusions based on them or decide.
It is the art of writing, analyzing and interpreting summaries.
Deals are expressed in currency.
These transactions are purely or partially financial in nature.
Need ?-
Accounting has the following benefits:
No matter how worthy a person is, he cannot remember all things. There are hundreds of transactions per day in business, goods are traded and sold. These can be both cash and credit. Payments are made in the form of wages, salaries, commissions, etc. It is difficult to remember them all. Accounting removes this disadvantage.
Accounting provides much important information related to business such as:
Knowledge of profit and loss.
Knowledge of property and liability.
How much money to take and how much to pay.
What is the economic condition of the business, etc
In the event of a quarrel with other traders, accounting records may be presented as evidence in the court. The court recognizes the accounting presented.
Financial accounting helps in determining the problems related to salaries, bonuses, allowances, etc. of employees.
Parttime blogger, freelancer , Youtuber, and full-time engineer