accounting

noun

ac·count·ing | \ ə-ˈkau̇n-tiŋ

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

British accounting firms have recently come under pressure amid several large-scale failures, including the collapse of construction firm Carillion PLC. — Nina Trentmann, WSJ, "U.K. Regulator Fines KPMG, Executives Over Insurance Audit," 30 Apr. 2019 The record shows both made unusual accounting choices that overstate sales and profitability. — Howard Schilit, WSJ, "Do Ride-Sharing Customers Sit in Front?," 28 Apr. 2019 Wochit No accounting of Major League Soccer history is complete without mentioning the history of prominent South and Central American players that have graced the league. — Patrick Brennan, Cincinnati.com, "Why FC Cincinnati will target South, Central America for building MLS roster," 10 July 2018 Molly currently works at an accounting firm there, according to her LinkedIn profile. — Eileen Reslen, Good Housekeeping, "This Is Why Molly Roloff Is Barely on "Little People, Big World"," 2 Apr. 2019 The House Intelligence Committee has sought to bolster its investigative staff with financial and forensic accounting experts, part of an expansion of the Trump-Russia probe since Democrats gained control of the chamber. — Greg Miller, The Seattle Times, "House Intelligence chairman voices concern that Mueller’s scrutiny of Trump’s finances isn’t adequate," 10 Feb. 2019 Experts are aware of these unique challenges, and the need for a cessation program accounting for them. — Carolyn L. Todd, SELF, "So, You Want to Quit Vaping...," 1 Feb. 2019 In other words, the urban farmers were losing money, at least by traditional accounting measures. — John Timmer, Ars Technica, "Urban farms could be incredibly efficient—but aren’t yet," 27 Dec. 2018 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

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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Dictionary Entries near accounting

account executive

account for (someone or something)

account for (something)

Statistics for accounting

Last Updated

18 May 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

See the full definition for accounting in the English Language Learners Dictionary

accounting

noun

ac·count·ing | \ ə-ˈkau̇n-tiŋ

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 expenditures — Case & Comment

2 : the settlement by judicial action of the assets of a partnership (as upon dissolution)