Accounting is the measurement, translation, or provision of assurance about information that will help managers, investors, tax authorities and other decision makers to make resource allocation decisions within companies, organizations, and government agencies. Accounting is the art of measuring, communicating and interpreting financial activity. Broadly, accounting is also known as the "language of business". Accounting aims to prepare an accurate financial statement for can be used by managers, policy makers, and other interested parties, such as shareholders, creditors, or owners. Daily recording involved in this process is known as bookkeeping. Financial accounting is one branch of accounting in which financial information on a business is recorded, classified, summarized, interpreted, and communicated. Auditing, a related discipline but remain separate from the accounting, is a process Diman a independent investigator examine the financial statements of an organization to provide an opinion or opinions - a plausible but not fully guaranteed - about the fairness and compliance with generally acceptable accounting principles.
Accounting practitioners are known as accountants. Certified accountants have a certain degree different in each country. An example is a Chartered Accountant (FCA, CA or ACA), Chartered Certified Accountant (ACCA or FCCA), Management Accountant (ACMA, FCMA or AICWA), Certified Public Accountant (CPA) and Certified General Accountant (CGA). In Indonesia, a certified public accountant CPA called Indonesia (formerly: BAP or Certified Public Accountant).
Modern Accounting
The heart of modern financial accounting is the bookkeeping system pairs. This system involves making at least two entries for each transaction: a debit in one account, and a related credit in another account. The total debits must always equal total credits. This will facilitate the examination if there is a mistake. This method is known first used in medieval Europe, although some are of the opinion that this method has been used since the days of ancient Greece.
Critics say that the standard accounting practice has not changed much since the first. Accounting reform in various forms always occur in each generation to maintain the relevance of accounting with capital assets or production capacity. However, this does not change the basic principles of accounting, which is expected not to depend on the economic impact that way.
Accounting as an art based on mathematical logic - now known as the "books in pairs" (double-entry bookkeeping) - has been understood in Italy since 1495 when Luca Pacioli (1445-1517), also known as Friar (Fr) Luca dal Borgo, published a book on the "books" in Venice. The first known English-language book published in London by John gouge or Gough in 1543.
A book featuring concise accounting instruction was also published in 1588 by John Mellis of Southwark, which contained perkataanya, "I am but the renuer and reviver of an ancient old copie printed here in London the 14 of August 1543: collected, published, made, and set forth by one Hugh Oldcastle, Scholemaster, who, as appeareth by his Treatise, then taught Arithmetics, and this booke in Saint Ollaves parish in Marko Lane. " John Mellis refers to the fact that the accounting principles d he described (which is a simple system of double entry / double entry) is "after the forme of Venice".
In the early 18th century, the services of accountants, based in London have been used during an investigation of a director of the South Sea Company, who was traded stock company. During this investigation, an accountant examine the company at least two books. His report described in Sawbridge and Company, by Charles Snell, Writing Master and Accountant in Foster Lane, London. United States owes the concept of public accounting purposes which have been registered in the UK memiiki Chartered Accountant in the 19th century.
Accounting reports
Accounting is called the language of business because it is a means to deliver financial information to parties who need it. The better we understand the language, the better our decisions, and the better we are in managing finances. To convey this information, the accounting report is used or what is known as financial statements. The financial statements of a company usually consists of four types of statements, ie balance sheet, l Reports of income, statement of changes in equity, and cash flows.
Balance Sheet, is a systematic list which contains information about assets, debts and capital of an enterprise at the end of a certain period. Called as a systematic list, because the balance sheet prepared on a particular sequence. In the balance can be known how many property companies, the company's ability to pay liabilities, and the company's ability to obtain additional loans from outside parties. It also can be obtained information about the company's debt to the creditor the amount of da n the number of owners of existing investment in the company.
The income statement, a summary of revenues and expenses of an enterprise for a certain period, so it can diketahu profits and losses experienced.
Statement of changes in capital, is a report that shows the change in capital for a certain period, maybe one month or one year. Through the statement of changes in capital can know the causes of changes in equity during a specific period.
Consolidated cash flow, with the existence of this report the financial statement users to evaluate the changes in net assets, financial structure (including liquidity and solvency) and the company's ability to generate cash in the future.
In the United States, practicing accountants are called Certified Public Accountant (CPA), Certified Internal Auditor (CIA) and Certified Management Accountant (CMA). The different types of certification is in terms of the types of services offered, although perhaps only one person has more than one certificate. Additionally, much accounting work done by someone without a certification, but under the supervision of a certified accountant.
CPA certification issued in the state of the locus in question in the form of a license to offer auditing services to the public, although most firms also menawakan accounting services, taxation, litigation support and other financial consultancy. Requirements to obtain CPA certification varies from state to state, but the Uniform Certified Public Accountant examination is required in every state. These exams are made and inspected by the American Institute of Certified Pub Accountants Lic.
CIA Certification issued by the Institute of Internal Auditors (IIA), which is given to candidates who graduated within four part exam. CIA mostly provides his services to the customers directly rather than to the public.
CMA Certification awarded by the Institute of Management Accountants (IMA), which is given to candidates who passed the four-part examination and meet certain practical experience on the terms the provisions of the IMA. CMA mostly provides his services to the customers directly rather than to the public. CMA also can offer services to the public, but with a smaller scope than the CPA.
Bureau of Labor Statistics (Bureau of Labor Statistics) from the United States Department of Labor (United States Department of Labor) estimates there are about one million people working as accountants and auditors in the United States.