Accounting 101 – What Is Accounting?

Accounting is the discipline that records a company’s financial transactions, organizes them, summarizes them and presents them in a variety of reports and analyses. It’s a field of study and practice that includes an array of job titles such as accountant, CPA (certified public accountant) and tax professional.

The discipline relies on a number of fundamental skills, including attention to detail and an ability to interpret data in the context of specific situations. It also requires a keen understanding of accounting concepts such as substance over form, professional judgment and scepticism.

An accountant’s work has a major impact on individuals and companies. For example, without accounting it would be impossible to assess a company’s health or its potential for growth and profitability. Additionally, accounting reduces uncertainty by providing data that allows people to anticipate future financial impacts and make informed decisions.

Throughout the article, we discuss some of the most important aspects of accounting and how it is used by individuals and businesses. We also cover the role of accountants in strategic planning, external compliance and fundraising, as well as the importance of practicing good bookkeeping and avoiding errors.

We have a short quiz at the end of this article that you can use to see how much you’ve learned about accounting. The results won’t count toward your course grade, but they will help you identify areas that require further study. You can take the quiz as many times as you like. Buchhaltung