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Accounting Bookkeeping is the measurement, processing, and transmission of financial information about economic units such as companies and corporations. Therefore,  Accounting, known as the “language of business,” measures the results of an organization’s economic activities and communicates this information to a wide variety of users, including investors, creditors, directors, and other regulators. Accountants are called accountants. Therefore,  relationships “accounting” And also,  “financial reporting” are often used synonymously.

Accounting can be divided into several areas: financial accounting, operational accounting, field auditing, tax accounting, and cost accounting.  Accounting information systems are designed to support accounting functions and related activities. Financial accounting focuses on communicating an organization’s financial information, including preparing annual financial statements, to external users of the information such as investors, regulators, and suppliers.

Origin of accounting

Accounting has been present in people’s lives for thousands of years. It was used more rudimentary in great civilizations like Egypt or Rome. Still, accounting as we know it today has its origins in the publication of the construction page in Italy. “Summa de Arithmetica, Geometría, Proportions e Proportionalita” by Luca Pacioli, who devoted himself to the description of the accounting methods of the Venetian merchants, commercial customs, contracts. And also,  practices of interest and exchange; This document establishes double-entry bookkeeping. Therefore,  precedent of what is now called “must and haves” in accounting jargon. However, since the former Italian republics and microstates were the great driving forces of trade in past centuries, these doctrines have been adapted and modified over time.

So when we speak of accounting, we mean a science – since it brings knowledge – to a technology – insofar as it works with processes and systems – to an information system – since it can capture, process and process offers from, conclusions about information – and finally Social Technology – because it combines scientific knowledge to solve specific problems in social life.

Types of accounting

Of course, as we’ve seen, many details need to be considered when registering. Some areas of the company also require accounting records. Therefore, different types of accounting have been developed. For example, public accounting is not the same as cost accounting. Therefore,  In this sense. And also, financial company does not use the same accounting elements as a farm company.

Still, we can say that accounting can be broken down into three details:

By nature: we’re talking about whether it’s public or private

By type of economic activity: for example, industrial, petroleum, commercial accounting, etc.

According to the application area: Depending on the specialization. And also, we differentiate between tax accounting, business administration  cost accounting, or financial accounting.

Accounting objectives

It should also be noted that the fundamental objectives of accounting are, on the one hand, to interpret the past to make decisions in the company and to satisfy the information needs of various interest groups (e.g., shareholders, lenders, or public administrations) and, on the other hand, all economic and Financial processes registered. If we break down these reasons, we can also say that accounting is used to:

  1. Firstly, Analyze and report on a company’s economic resources.
  2. Enable managers to plan and control business transactions properly.
  3. Control and record the management of the directors and the company’s taxation.
  4. Helps in forecasting cash flow.
  5. lastly, Cooperation with the information necessary for the production of national statistics on economic activities.

Accounting since the end of the 20th century

With the advances in technology that the world has known since the late 20th century, it is imperative to focus on computing. And also, Modern resources have revolutionized the traditional approach to accounting. Therefore, Experts in this discipline have been made easier thanks to spreadsheets and property or inventory registers with better control of inputs and outputs.

Therefore,  are many accounting programs or software available to assist companies in their day-to-day accounting tasks. And also,  Programs that simplify billing facilitate customer management, automatically settle balances and even control the working hours of company employees.

Accounting harmonization

Therefore,  harmonization of accounting is a process that has been carried out in recent years to make the annual financial statements of companies comparable. This process is vital in a globalized and competitive world where companies receive funding anywhere globally but are easily comparable for those stakeholders. Either because you want to invest in it or simply because you want to work in your company. The International Financial Reporting Standards (IFRS), also known as the abbreviation IFRS, were created.

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