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Accounting, also known as accountancy, is the process of recording and processing information about economic entities, such as businesses and corporations. [1] [2] Accounting measures the results of an organization's economic activities and conveys this information to a variety of stakeholders, including investors, creditors, management, and regulators. [3]
The accounting equation plays a significant role as the foundation of the double-entry bookkeeping system. The primary aim of the double-entry system is to keep track of debits and credits and ensure that the sum of these always matches up to the company assets, a calculation carried out by the accounting equation.
Download as PDF; Printable version; In other projects ... Auditing terms (25 P) Pages in category "Accounting terminology"
Accounting – measurement, statement or provision of assurance about financial information primarily used by managers, investors, tax authorities and other decision makers to make resource allocation decisions within companies, organizations, and public agencies. The terms derive from the use of financial accounts.
Generally Accepted Accounting Principles (GAAP) [a] is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC), [1] and is the default accounting standard used by companies based in the United States.
One of the basic principles in accounting is "The Measuring Unit principle": The unit of measure in accounting shall be the base money unit of the most relevant currency. This principle also assumes the unit of measure is stable; that is, changes in its general purchasing power are not considered sufficiently important to require adjustments to ...
The terms equity [for profit enterprise] or net assets [not-for-profit enterprise] represent the residual interest in the assets of an entity that remains after deducting its liabilities (CF E61). Equity accounts include common stock, paid-in capital, and retained earnings. Equity accounts can vary depending where an entity is domiciled as some ...
The accounting equation is a statement of equality between the debits and the credits. The rules of debit and credit depend on the nature of an account. For the purpose of the accounting equation approach, all the accounts are classified into the following five types: assets, capital, liabilities, revenues/incomes, or expenses/losses.