ACCOUNTING

ACCOUNTING

1. Definition

   • Accounting is the process of systematically recording, measuring, and communicating information about financial transactions.
     • Accounting is the transaction log with storage, classification, recovery, resumption, and presenting the results in various reports and Analysis Accounting is also a Field of Study and profession dedicated to the realization of said tasks
       • and management accounting focuses on the measurement, analysis and reporting of information for internal use by management. The recording of financial transactions, so that summaries of the financials may be presented in financial reports, is known as bookkeeping, of which double-entry bookkeeping is the most common system.

2. History

   • Accounting has been around for many thousands of years. In fact, it can be traced back to very ancient civilizations.
     • Economic historians say there is evidence it existed approximately five thousand years ago in ancient Mesopotamia.
       • Many say that accounting probably developed alongside our ability to write words, count numbers, and start using money.

3. Characteristies

   • The accounting of a company focuses, in short, on the process of decision making and help to reduce the degree of uncertainty in the long term. As we have said, it is a science that helps, thanks to the comparison between periods and the calculation of forecasts, to have a focus on the future, not only past and present.
     • it covers all the operations of the business in a systematic, historical and chronological manner. That is, a protocol is established on how to proceed and collect each economic movement that occurs. Likewise, a record of all this is kept (in addition, by law it is mandatory) and allows to establish comparisons between different periods, thus studying the good or bad progress of the company.
       • both quantitative and qualitative information is used. Although quantitative information is easy to measure, since it refers to the calculation of financial transactions (usually through simple formulas); Qualitative information refers more to the importance given by each company to what data and information to make decisions. Both types of information are important and necessary to direct and manage the business.

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