Unit 2 Listen and Read:
What is accounting?
Accounting is the recording, classifying, summarizing and interpreting of financial events and transactions to provide management and other interested parties the information they need to make better decisions. Transactions include buying and selling of goods and services, acquiring insurance, using supplies. Transactions may be recorded by hand or they may be recorded in a computer system. Of course, the trend today is to use computers since the process is often repetitive and complex, and computers greatly simplify the task. After the transactions have been recorded, they are usually classified into groups that have common characteristics. For example, all purchases are grouped together, as are sales transactions. A businessperson is thus able to obtain needed information about purchases, sales, and other transactions that occur over a given period of time. The methods used to record and summarize accounting data into reports is called accounting system. Systems that use computers enable an organization to get financial reports daily if they so desire.