Home/Uncategorized/What Is Accounting?

What Is Accounting?

Accounting or accountancy is a process used for the collection, processing and communication of financial information.

Bookkeeping is a major part of an accountant’s role. Bookkeeping includes recording, classifying and summarizing the transactions of a business.

Any event whereby a business interacts with another business can be considered a transaction—such as the payment of wages or the sale of goods. 

The History of Accounting

Some archaeologists believe that accounting records date back to 3000 BC.

The Father of Accounting

However, the modern field of accounting was established by the Italian mathematician Luca Pacioli in 1494. Luca Pacioli published the first book about double-entry bookkeeping on 10 November 1494.

Double Entry Bookkeeping

Double-entry bookkeeping is the primary system used today. And the main principles have essentially been unchanged.

The recording of trading activities was made very simple by the first bookkeeping systems—and is why they have essentially been unchanged since they were first implemented in 1494.

What Does An Accountant Do?

The accounting sector of an organisation can be regarded as a service activity.

The accounting department of a business or organisation is typically made up of accountants, bookkeepers or both. 

Management Accounting

The function of accounting is to essentially be a liaison for the decision-makers of a business and the actual business activities that are taking place. This link that the accounting function creates is essential in the running of a successful business.

This information is generally not distributed to people outside of the company’s management. Budgets, standards for controlling operations, and estimating selling prices when quoting prices for new work are some examples of management accounting.

Creating Financial Statements

The accountant is responsible for the creation of financial statements and reports. Including the annual and quarterly reports of a business.

These reports are distributed to various parties within the business to provide information to be used in the decision-making process.

Accountant Responsibilities 

The common tasks to be carried out by an accountant are listed below:

  • Developing and maintaining the accounting system
  • Advising on accounting systems
  • Preparing budgets and performance reports
  • Auditing the financial statements of companies
  • Providing key management information and advice
  • Financial planning for individuals

Accountant Salary

According to glassdoor.com: The national average salary for an Accountant is $56,560 in United States.
I have also listed the salaries of a few similar accounting roles below.

Salaries for Related Job Titles

Visit our What Is a CPA? post to learn more about the Certified Public Accountant license and the associated benefits.

By |2019-04-11T12:09:00+11:00March 6th, 2019|Categories: Uncategorized|

Leave A Comment