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What is accounting in simple words
What is Accounting? Accounting is the process of recording, organizing, and managing financial transactions of a business or person. It helps us know how much money is earned, spent, saved, or lost. Simple Definition “Accounting is the language of business.” It records all money-related activities so businesses can make better decisions. Example of Accounting Suppose you start a small shop. You buy products for Rs. 10,000 You sell them for Rs. 15,000 Accounting helps you calculate: Sales = Rs. 15,000 Cost = Rs. 10,000 Profit = Rs. 5,000 Without accounting, you cannot know whether your business is making profit or loss. Importance of Accounting Helps track income and expenses Shows profit or loss Helps in tax filing Supports business decisions Keeps financial records organized
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