accounting

noun
ac·​count·​ing | \ ə-ˈkau̇n-tiŋ How to pronounce accounting (audio) \

Definition of accounting

1 : the system of recording and summarizing business and financial transactions and analyzing, verifying, and reporting the results also : the principles and procedures of this system studied accounting as a freshman
2a : work done in accounting or by accountants
b : an instance of applied accounting or of the settling or presenting of accounts
3 : account sense 2 They were required to provide a detailed accounting of their actions.

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Examples of accounting in a Sentence

what accounting can you give for your bizarre actions on the night in question?

Recent Examples on the Web

Both the New York and Arlington offers were negotiated in secret, without public input or a true accounting of the public costs of these subsidies. Patrick Sisson, Curbed, "Amazon HQ2 subsidies are deeply unpopular, but far from uncommon," 14 Nov. 2018 The Senate will not have a full nonparitsan accounting of Kavanaugh’s documents in accordance with the traditional process until October, and yet this hearing is scheduled for September 4. Lauren Duca, Teen Vogue, "The Nomination of Brett Kavanaugh to the Supreme Court Feels Inevitable. But We Can Actually Stop Him.," 31 Aug. 2018 An official accounting of their findings has not been released yet. Mark Price, charlotteobserver, "Mysterious sonar 'anomaly' off NC could be shipwreck, rock formation — 'or otherwise'," 27 June 2018 Rather, candor is his currency, an accounting of his failings that secures his place in this universe. Sean O'neal, GQ, "The Tortured Mind Of Dan Harmon," 30 May 2018 Ms Tsai also promised to provide a proper accounting of the human-rights abuses committed during the KMT’s long, harsh dictatorship, and to remove all monuments glorifying this era. The Economist, "Taiwan’s president has upset both business and workers," 26 May 2018 Taking a global perspective on the events of 1968, Katsiaficas has made a somewhat obsessive accounting of all the student demonstrations between April and June of 1968: West Germany saw 63; Japan, 9; France, 1,205. Alan Wolfe, The New Republic, "A Most Violent Year," 18 May 2018 Henry County residents hoping to create a city of Eagle’s Landing filed a complaint Tuesday with the Georgia Attorney General’s Office over the failure of Stockbridge to provide an accounting of its spending in opposition to the cityhood effort. Leon Stafford, ajc, "Eagle’s Landing backers file open records complaint against Stockbridge," 2 May 2018 Dees claimed Farmer spread the funds among more cases than the pair had agreed to and wanted a better accounting of the money, according to an Associated Press report from 1977. Sven Berg, idahostatesman, "These churches are "hate groups," a watchdog says. But what's really behind that label?," 24 Apr. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'accounting.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of accounting

circa 1676, in the meaning defined at sense 2b

History and Etymology for accounting

Middle English acountynge "reckoning, calculation," from gerund of accounten "to account entry 2"

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Last Updated

9 Feb 2019

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Time Traveler for accounting

The first known use of accounting was circa 1676

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More Definitions for accounting

accounting

noun

Financial Definition of accounting

What It Is

Accounting is the process of systematically recording, measuring, and communicating information about financial transactions.

How It Works

At the heart of accounting is the double-entry bookkeeping method. This involves making at least two recording entries for every transaction: a debit in one account and a credit in another account. The method helps prevent errors because the sum of the debits should equal the sum of the credits. The three major financial statements produced by accounting are the income statement, the balance sheet, and the cash flow statement.

Accounting can be done on a cash basis (cash accounting) or on an accrual basis (accrual accounting). Cash accounting records cash inflows and outflows in the period in which they occur. Accrual accounting records income and expenses in the period to which they are attributable rather than when cash payments come and go. For example, a check written in April for March's utilities would appear as a March expense under the accrual method and as an April expense under the cash method.

There are two general kinds of accounting. Financial accounting is the recording and communication of economic information in accordance with Generally Accepted Accounting Principles (GAAP) and is primarily for external users. Managerial accounting is the recording and communication of economic information that may or may not be in accordance with GAAP and is for internal users. Other accounting specialty areas exist, such as tax accounting, oil and gas accounting, or forensic accounting.

There are two kinds of users of accounting information: internal users and external users. Internal users are usually company managers who use accounting information to decide how to plan and control operations on a daily and long-term basis. External users are existing or potential investors, creditors, analysts, financial advisers, regulatory authorities, unions, and the general public. They use accounting information to make a myriad of decisions about whether to buy, hold, sell, lend, continue a relationship, or make an agreement.

The Financial Accounting Standards Board (FASB), the Securities and Exchange Commission (SEC), the IRS, and other regulatory bodies set accounting standards and requirements for accounting frequency and presentation.

Why It Matters

The definition of accounting on InvestingAnswers.Accounting is tremendously important because it is the language of business, and it is at the root of making informed business decisions. Without accounting, managers would not know which products were successful, which business decisions were the right ones, and whether the company was earning money. It would not know how much to pay in taxes, whether to lease or buy an asset, or whether to merge with another company. In short, accounting doesn't just count the beans, it measures a company's success at meeting its goals and it helps investors understand how efficiently their economic resources are being used. This is why companies must be proficient in accounting in order to make good decisions.

Accounting can be controversial, in that accounting rules and methods are sometimes subject to interpretation or can appear to distort a company's true performance. This is another important reason that effective leaders and managers must thoroughly understand the accounting impact of their decisions.

Source: Investing Answers

accounting

noun

English Language Learners Definition of accounting

: the skill, system, or job of keeping the financial records of a business or person

accounting

noun
ac·​count·​ing | \ ə-ˈkau̇n-tiŋ How to pronounce accounting (audio) \

Kids Definition of accounting

: the work of keeping a person's or a business's financial records

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accounting

noun
ac·​count·​ing

Legal Definition of accounting

1 : an often court-ordered presentment or examination of accounts a complete accounting would be necessary to determine the nature of the expendituresCase & Comment
2 : the settlement by judicial action of the assets of a partnership (as upon dissolution)

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