accounting
noun
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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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Synonyms for accounting
Synonyms
account, argument, case, explanation, rationale, reason
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Examples of accounting in a Sentence
Recent Examples on the Web
Some of that comes from accounting issues within the UW System unearthed in recent years. — Karen Herzog, Milwaukee Journal Sentinel, "Retro UW-Madison delivery van hits road with myth-busting facts, Babcock ice cream," 13 July 2018 The cannabis measure would impose a 1 percent tax on gross receipts — the total revenue a business receives during an accounting period — beginning Jan. 1, 2020. — Trisha Thadani, SFChronicle.com, "SF supervisors committee tinkers with tax measures on cannabis, ride services," 13 July 2018 Before opening Sizzles in August 2014, Nolte had worked in chain restaurants and earned an accounting degree. — Vickie Snow Jurkowski, Daily Southtown, "Burgers, desserts, compassion are staples at Sizzles in Lockport," 12 July 2018 Undoubtedly, those sitting out the #MeToo moment would insist as much, demand that the men who lived in a pre-feminist past need not be subjected to an accounting today. — Dana Snitzky, Longreads, "Hemingway’s Last Girl," 12 July 2018 Meissner is known for representing a whistleblower who tipped the SEC off to accounting violations at Monsanto, and received $22 million for his troubles. — Kevin Kelleher, Fortune, "Tesla Whistleblower Ups Ante, Making a Formal Complaint With the SEC," 12 July 2018 After the oil market tanked in late 2014, Cantu demanded an accounting. — Patrick Danner, San Antonio Express-News, "FourWinds bookkeeper who testified against Uresti sentenced to year in prison camp," 11 July 2018 But in the early 2000s, its founder, Charles B. Wang, and members of his senior leadership team were engulfed in an accounting scandal. — New York Times, "Broadcom Reaches Nearly $19 Billion Deal to Buy CA Technologies," 11 July 2018 The remainder of the refund, $21.7 million, comes from an accounting adjustment on the restoration costs. — Jim Turner, miamiherald, "FPL customers should see a refund on their bill in August," 10 July 2018These 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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More Definitions for accounting
accounting
nounFinancial 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
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
See the full definition for accounting in the English Language Learners Dictionary
accounting
noun
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Kids Definition of accounting
: the work of keeping a person's or a business's financial records
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accounting
nounLegal 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 expenditures —Case & Comment
2 : the settlement by judicial action of the assets of a partnership (as upon dissolution)
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