Accounting is a system of gathering, summarizing, and communicating financial information for a business firm, government, or other organization. Accounting, also called accountancy, enables decision makers to interpret financial information and use the results in planning for the future.
Business people often call accounting the "language of business" because they use accounting data in communicating about a firm's activities. Information provided by accountants helps managers and other executives understand the results of business transactions and evaluate the financial status of their organization. With this knowledge, managers can make informed decisions about such matters as production, marketing, and financing. Charities, churches, colleges, government agencies, and other nonprofit organizations also use accounting to keep track of their finances.
Accounting is closely related to a record-keeping process called bookkeeping. Bookkeeping deals mainly with recording and analyzing financial information. Accountants carry out these activities but also design and install information systems, perform audits, interpret financial statements, and prepare tax returns.
