Accounting, also known as bookkeeping, is the process of recording, summarizing, analyzing, and reporting financial transactions of a business or organization. The purpose of accounting is to provide information that is useful in making decisions about how to allocate resources and to provide information to stakeholders such as investors, creditors, and management.

Bookkeeping involves the daily recording of financial transactions such as purchases, sales, receipts, and payments in a system such as a ledger or a software program. These transactions are then classified into categories such as assets, liabilities, equity, revenues, and expenses.

Financial statements such as the balance sheet, income statement, and cash flow statement are then prepared from the recorded data. These statements provide an overview of the financial position and performance of the business or organization.

Accounting also involves the use of various accounting standards and principles such as Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) to ensure that financial information is reported accurately and consistently. Additionally, accounting professionals are responsible for ensuring compliance with tax laws and regulations.

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