Accounting



Accounting

Introduction

Accounting is defines as the production of financial records and the financial statements within an organization. Accounting is also said as the systematic recording of financial transactions which in turn help in summarizing and reporting the transaction into the financial statement. The financial transactions are the recording of the daily transaction which occurs because of the different operation in an organization while the financial statement is made for summarizing the financial transaction of the organization in the one palace. The various types of financial statement include the income statement, balance sheet, cash flow statement and equity statement (Beams et. al, 2000, Pp. nd). This study focuses on the accounting and its types, various accounting method, principles of accounting and the importance of accounting in an organization.

Discussion

Accounting and its Types

Accounting is known as the systematic recording of daily, weekly, monthly, quarterly, half yearly and yearly transaction in the financial records of an organization. for the accounting purpose, an accountant made the financial statement which is mostly distributed in the four parts. Income statement is the first part of the financial statement which is further distributed in revenue and the expenses section. Balance sheet is the second part of the financial statement which is further distributed in asset, liability and the equity part. Cash flow is the third part of the financial statement which includes the cash flow from operation, investing activities and the financing activities. While, the equity statement is the fourth part which includes the income and the revenue section (Slater, 2012, Pp. nd).

There are four types of accounting mostly used in the profitable and non-profitable organization. These include the financial accounting, management accounting, governmental accounting and the tax accounting.

Financial Accounting

In the financial accounting, the organizations made the financial statement for the internal and external use. The financial statements ...