What is Accounting

Accounting is the skill of reporting, recording, summarizing and examining financial dealings. A good accounting system could be a simple, practical check register, or perhaps as with MS Office Accounting, it's rather a full record of all of the activities with regards to a business, providing specifics of every facet of the company, permitting the evaluation of economic trends, and offering understanding of future prospects. Get more information on What is Accounting.

Double-Entry Accounting

Since the 15th century, when Luca Pacioli initial wrote concerning the practice, the word "accounting" has described double-entry accounting. It runs on the system of accounts to classify dealings. Each transaction which is entered includes a number of credits and debits, as well as the total debits should equal the entire credits. For instance, if you buy a vehicle with a payment in advance of $2,000 along with a loan from the bank for another $16,000, the records to report this purchase will be the following:

• Debit of $18,000 to the fixed asset account called, for instance, "Vehicles."
• Credit of $2,000 to the bank account for your down payment.
• Credit for an Auto Loan account for $16,000

Have a look at the Types of Accounting for more details