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

Congratulations to Robyn Denholm, the new chairwoman of Tesla’s board! Denholm got her start at the now-defunct Arthur Andersen, the accounting firm best known for its work shredding Enron’s documents. — Elizabeth Lopatto, The Verge, "Tesla’s new chairwoman is walking into SEC and DOJ probes," 9 Nov. 2018 It was seeded through a legitimate update module of M.E.Doc, a tax-accounting application that’s widely used in Ukraine. — Dan Goodin, Ars Technica, "Two new supply-chain attacks come to light in less than a week," 23 Oct. 2018 And California could buy carbon credits, which would theoretically represent carbon reductions by entities out of state, but those are even more controversial, with even more room for accounting tricks. — David Roberts, Vox, "California Gov. Jerry Brown casually drops history’s most ambitious climate target," 11 Sep. 2018 Their new process involves accounting for the number of low-income students and students of color each school serves, as well as how those students performed on state tests. — Dahlia Bazzaz, The Seattle Times, "The February ballot for Seattle’s school construction levy, and how feedback changed it," 16 Oct. 2018 Losses in cities were estimated to be worth 53 billion zlotys ($14 billion; 12 billion euros,) with Warsaw alone accounting for more than two-thirds of the total cost. — Fox News, "Poland totals WWII occupation's cost amid Germany claim talk," 31 Aug. 2018 In the same journal, five years later, the authors were allowed to publish a new, revised article accounting for their mistakes. — David Becker, Philly.com, "Major study on Mediterranean Diet was retracted, but this cardiologist recommends this way of eating," 19 June 2018 But Durant and the Warriors came back with a thunderous response by crushing them in Game 4 with a 118-92 victory at Smoothie King Center, which included Durant accounting for 38 points, nine rebounds and five assists. — William Guillory, NOLA.com, "Pelicans' confidence not shaken by 3-1 deficit vs. Warriors," 8 May 2018 Previous research has quantified total emissions from tourism as accounting for 2.5% to 3% of global greenhouse gas emissions. — Susan Scutti, CNN, "Global tourism's carbon footprint is four times bigger than thought, study says," 7 May 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

30 Nov 2018

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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)