
Introduction to Accounting
Accounting is the process of recording, analyzing, and summarizing financial information so that it can be used for decision-making. Every business—big or small—uses accounting to keep track of its money, understand its financial position, and plan for the future.
At its core, accounting answers three important questions:
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What does the business own? (Assets)
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What does it owe? (Liabilities)
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What is its worth? (Equity)
Through tools like financial statements—including the income statement, balance sheet, and cash flow statement—accounting provides a complete picture of an organization’s financial health. This information helps owners, managers, investors, and governments make informed decisions.
Accounting is often called the “language of business” because it communicates financial results in a standardized way. Without it, companies would have no reliable method to measure performance, control finances, or plan for growth.
- Teacher: Admin User