ACCOUNTING DEFINITION
That is the debate around accounting, although the dilemma,
in fact, has no answer. Although it is considered as a science because it
provides true knowledge (which can be systematized and verified and that is
fallible), and not assumptions, this does not seem enough to give this
nomination true, and the most accurate would be to say that is not a science,
not an art, but a way of recording the economic or financial activities of a
legal person. In a word, accounting is a tool that we have to manage the
expenses and income of our company.
Accounting comes to life through the formulation of
hypotheses and the construction of theories that allow us to anticipate and
detail the phenomena of its object of study. On the other hand, it is
considered a technique since, based on its procedures, data can be processed
and applied.
Accounting, then, can be considered as a science or a technique
that aims to provide useful information for making decisions related to the economy.
It analyzes the equity and translates its results into the so-called financial
or financial statements, which summarize economic situations.
To understand accounting in depth, it is necessary to
establish three types of accounting: Public Accounting (controlling the
expenses that make the state), the Social (management of the public thing and
the obligations that individuals and the state have with each other and the
environment in which they live) and the Business (Analyzes the commercial
relations of an individual or a company).
There are two main types of accounting: financial or
external, which provides information on the financial status of a company to
the economic agents concerned (such as customers, investors and suppliers) and
is officially regulated, and management accounting or internal, which is the
one used to calculate the costs and economic movements within a company.
If we look at the theoretical books of accounting we can understand
that the fundamental objectives of it are two: interpret the past to make
decisions that affect the future positively and record all economic and
financial operations. If we try to disaggregate these ambiguous reasons, we can
say that the accounting serves to:
* Analyze and give part of the economic resources of an
entity;
* Allow administrators to properly plan and manage business transactions;
* Control and keep a record of the management of the
administrators and the tax burdens of the entity;
* Help predict cash flows;
* Collaborate with the necessary information when making a
national statistics about economic activities.
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