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Accounting is basically following a set of rules and regulations, which allows a company to analyze and interpret the financial performance of their business and look at statistics such as net profit, company's equity, gross profit ratio etc. Accounting can be defined as the systematic recording, reporting and analysis of financial transactions of a business.
Accounting can be defined as the process of collecting, recording, presenting & analyzing/interpreting financial information for the Company. Investors & Stakeholders of the Company are also interested financial data about your organization.
Accounting department of an organization provides not only current operating information for management but also track the historical transactions of the entity. It encompases not only cash earned by the organization but also the investment activities, financing activities, lending activities, non-cash charges and recognition of and expiation of the useful life of assets used in the operating of the entity. It also encompasses intangible recording and recognition of items that may have a value yet are not specific in nature such as organizational cost, patents, copyrights and trademarks.
Accounting is a major means of helping managers of an organization, equity investors of an organization, potential equity investors, potential creditors and bond holders of an organization, suppliers and customers of an organization and other stake holders to take decisions.
Accounting systems of a company provide information such as financial statements (the income statement, balance sheet & statement of cash flows) and performance reports (such as the cost of operating a plant or providing a service). Accountant Managers use accounting information system in the following ways:--
a. To administer each of the activity or functional areas for which they are responsible.
b. To coordinate those activities or functions within the framework of the organization as a whole.
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