the process of identifying, measuring, and communicating economic information to permit informed judgments and decisions by the users of the information.This information is primarily financial—stated in money terms. Accounting, then, is a measurement and communication process used to report on the activities of profit-seeking business organizations. As a measurement and communication process for business, accounting supplies information that permits informed judgments and decisions by users of the data.
Accounting is often confused with bookkeeping. Bookkeeping is a mechanical process that records the routine economic activities of a business. Accounting includes bookkeeping but goes well beyond it in scope. Accountants analyze and interpret financial information, prepare financial statements, conduct audits, design accounting systems, prepare special business and financial studies, prepare forecasts and budgets, and provide tax services.You probably will find that of all the business knowledge you have acquired or will learn, the study of accounting will be the most useful. Your financial and economic decisions as a student and consumer involve accounting information. When you file income tax returns, accounting information helps determine your taxes payable. Watch this video to get a better idea of why it is important to study accounting.
As you move through this course, keep in mind an important concept - accounting has the OPPOSITE mindset of a bank account. A bank account is something you own but something the bank owes you. A debit card is called this because the bank will reduce the amount from your bank account making it less money the bank owes you if you were to close your account.
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