Accounts - Introduction

What is Accounting?

Accounting is the art of identifying, recording, and reporting financial information relating to a particular entity to interested parties. The main way of communicating this financial information is through financial statements, such as the balance sheet and income statement. There are two main streams of accounting:

1. Managerial accountingThis form of accounting provides accounting information to help managers make decisions to manage the business. Financial information is used by managers to set budgets, analyze the costs of the different products, control and monitor work in progress, and so on.
2. Financial accounting
   This form of accounting is used to prepare accounting information for people outside the organization or not involved in the day-to-day running of the company. Here we are mainly concerned with financial accounting.
   

Users of accounting system
1. Shareholder / Investors
2. Tax authorities
3. Lenders to company
4. Financial analysts
5. Suppliers 
6. Employees

 Organization forms