What is Accounting? – Economic Development Jobs

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There is so much to discover about accounting. The terms like accounts payable, transport tax, balance sheet and balance are often confusing. Accounting firms are available to help with the financials of your business. Accounting is a term that is often misunderstood and how is it utilized? Keep reading to discover more.

The first step is to define the definition of accounting. Accounting can be a helpful method to record and summarize financial information. Accounting can help organize the financial details. It allows companies to make sense of financial data and to ensure that they are in compliance with financial laws.

There are two components to accounting: bookkeeping and analysis. However, bookkeeping is what makes up the foundation of accounting. Bookkeeping involves gathering and organizing financial information. This involves recording transactions, writing down financial information, and preparing financial statements. It is possible to determine what your business’s profitability is and how many customers owe you. Even what taxes must be paid.

The term “analysis” or management accounting, provides information for decision making, planning, and controlling the company. For example, information relating to financial decisions, budgeting and measuring performance.

To learn more about accounting and the reasons why it’s used to make a profit, check out the video below!

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