Accounting begins with transaction recording.

Any activity or occurrence involving your company's money must

be recorded in your general ledger. Bookkeeping entails keeping track of business transactions in this manner.

The first step in what accountants term the "accounting cycle" is bookkeeping, which is a process that takes in
transaction data and produces accurate and consistent financial reporting.

There are six major steps in the accounting cycle:

Examine and keep track of transactions. Gather any invoices, bank or credit card statements, or receipts related
to business transactions.

Fill in the ledger with journal entries. It's time to take those documents and start recording your transactions in a
journal. A transaction is broken down into three parts: when it happened, what it was for, and how much it cost.
Single-entry accounting is used by some firms, in which only the expense or revenue is recorded. However,
double-entry accounting is more popular, as it records each transaction in two accounts: where money comes
from and where it goes.

Make a trial balance that isn't altered. List all of your company's accounts and their balances at the end of each
reporting period.

At the end of the quarter, prepare adjustment entries. You prepare modifying entries when you need to edit
entries you've already produced. For example, if a client is late paying an invoice and you provide a 5% reduction
to help them pay, you'd enter the discount as an adjusting entry rather than modifying an existing entry.

Make a corrected trial balance. You're left with an adjusted trial balance after entering adjusting entries. This
data can now be transformed into financial statements.

Financial statements should be prepared. Finally, all of the data you've gathered is transformed into your own
data.

We'll skip over the nitty gritty details of the accounting cycle and focus on the final product: financial
statements, because accounting software takes your accounting data and automates most of these rules and
processes.

Accounting, often known as accounting, is the measurement, processing, and communication of financial and
non-financial data concerning businesses and corporations. Accounting, dubbed the "language of business,"
measures the outcomes of an organization's economic actions and communicates this information to a number
of stakeholders, including investors, creditors, managers, and regulators. Accounting and financial reporting are
frequently used interchangeably.

Financial accounting, management accounting, tax accounting, and cost accounting are some of the fields of
accounting. Financial accounting focuses on the reporting of an organization's financial information to external
users of the information, such as investors, regulators, and suppliers, including the preparation of financial
statements;[7] and management accounting focuses on the measurement, analysis, and reporting of
information for intercompany transactions.

Throughout human history, accounting has existed in many forms and levels of sophistication. Luca Pacioli, an
Italian mathematician and Franciscan friar, is credited with developing the double-entry accounting system that
is used today. Financial statements are often audited by accounting firms[10] and prepared in line with widely
accepted accounting rules (GAAP). As of 2012, "all major economies" have committed to implementing or
adopting the International Financial Reporting Standards (IFRS) .[11]

Accounting dates back thousands of years and can be traced to ancient civilizations.[12][13][14] The early
development of accounting dates back to ancient Mesopotamia, and is closely related to developments in
writing, counting, and money;[12] there is also evidence of early forms of bookkeeping in ancient Iran,[15][16],
and early auditing systems by the ancient Egyptians and Babylonians .[17]
The Jewish community of the early-medieval Middle East[18][19] pioneered double-entry bookkeeping, which
was improved in medieval Europe[20]. Accounting was split into financial accounting and managerial accounting
with the establishment of joint-stock businesses.

Both accounting and accountancy were in use in Great Britain by the mid-1800s, and are derived from the 18th-
century words accompting and accountantship.[26] The verb "to account" in Middle English had the form
accounten, which was derived from the Old French word aconter,[27] which is related to the Vulgar Latin word
computare, which means "to reckon." Putare is the root of computare, which means "to prune, purify, rectify an
account, hence to count or calculate, as well as to think" .[27]

The word was once spelled in English as "accomptant," but through time, the word, which was always spoken
without the "p," evolved into its current form, both in pronunciation and orthography .[28]