Accounting

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Accounting, also known as bookkeeping or accountancy (the practice of accounting), is the process of recording transactions within a business. Before the modern era, many businesses used cash-basis accounting, which simply records when money is spent. Today most countries use the double-entry method, which was invented in Italy during the renaissance.^[1] In the double entry method, all transactions (not just cash transactions) are recorded, and every transaction has 2 entries: a credit and a debit. Practicing accountants are expected to conform to a set of guidelines known as Generally Accepted Accounting Practices, or GAAP.

The information generated by accounting is used for many purposes. One is in financial management, where a business can be analyzed using various ratios of its accounting numbers. A company's books are also used to determine tax liability.

Certification[edit]

In the United States, publicly traded corporations are required to provide financial data to the public. This data must be independently verified, or attested to, by a special class of accountants known as Certified Public Accountants, or CPA. Worldwide, there are classes of certification, such as a Chartered Accountant in the UK.

Notes[edit]