Accounting is the process of recording, classifying, and summarizing financial transactions to provide information that is useful for making business decisions. The field of accounting is essential for businesses of all sizes and types, as it provides information about the financial health of a company and helps decision-makers understand the financial impact of their decisions.
The basic building blocks of accounting are the double-entry system, which involves recording each transaction in two places. For example, when a company receives payment from a customer, the payment is recorded as a debit in the customer’s account and a credit in the company’s cash account. This system ensures that the financial statements of a company are accurate and complete.