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Tuesday, 9 October 2018

What is accounting?









Definition

Accounting is an art of identifying, recording, posting, verifying and reporting business transactions.

Explanation:

Accounting is an organized process in which business transactions are identified through source documents, recorded in General/Special journals, Then posted in general ledgers then trial balance, verified through audit, and reported in the financial statements. 

Financial statements helps Investors and Lenders to verify the financial position of the business. And not only that, but financial statements also help auditors to identify any potential fraud in the business.

In today's world business transactions are full of complexities and accounting helps in summarizing these complexities for the growth of business. 

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