What is Accounting?

Accounting is the process of recording, classifying, and summarizing financial transactions to provide information that is useful in making business decisions. The purpose of accounting is to create financial statements that show an organization's financial health. Stakeholders then use this information to make decisions about where to allocate financial resources.

The four most common areas of focus in accounting are financial accounting, managerial accounting, tax accounting, and government accounting. These are some of the most common jobs that accounting students pursue.

Financial accountants track and synthesize financial transactions for a business. Financial accountants produce balance sheets, income statements, and cash flow statements that are useful in making decisions about resource allocation and investments. For example, financial accounting information can be used to decide whether to invest in a company or to provide loans to a company.

Managerial accountants provide information and insights to managers to make decisions about allocating resources within an organization. Managerial accounting differs from financial accounting in that it focuses on providing information for decision-makers within the company rather than shareholders and other external parties. Financial accounting focuses on historical data and reports, while managerial accounting focuses on providing information that can be used to make future decisions.

Tax accountants prepare and file taxes. This includes calculating how much tax is owed, as well as filing the necessary paperwork with the government. Tax accountants may also provide advice on financial planning and investment strategies. As a result, they play an important role in helping individuals and businesses manage their finances.

Government accountants record, classify, and summarize financial transactions to provide information that is useful in making decisions about the allocation of resources. The primary users of government accounting information are elected officials, government employees, and citizens. For example, elected officials need information about the overall financial condition of the government to make informed decisions about expenditures.

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Accounting Topics

Accounting Ethics

Learn the definition of ethics in accounting and understand why ethics is important in accounting. Discover the code of ethical practices in accounting.

Accounting Software

In this lesson, you will learn what accounting software is, as well as its purpose, benefits, and background. You will also be introduced to various types of accounting software and their uses.

Accounting Terms

Discover the principles of basic accounting and learn essential accounting terminology. Explore examples of these accounting terms in real-life situations.

Accounting records

Learn about accounting records. Identify the role of accounting records and examine the different types of accounting records, such as income statements.

Auditing

Learn about financial audits. Understand what a financial audit is, identify the purpose of a financial audit, and learn how to conduct a financial audit.

Bookkeeping

Learn what bookkeeping is in accounting by examining a definition, how it's used, and its importance. Explore basic bookkeeping and see what bookkeeping jobs entail.

Cost Accounting

Learn about cost accounting vs financial accounting. Examine the pros, cons, and principles of cost accounting systems and view cost accounting examples.

Financial Accounting

Learn about financial accounting. Discover a financial accounting definition and principles of financial accounting. Explore the methods financial accountants use.

Financial Reporting

Learn what financial reporting is and how to use a financial report for analysis. See a financial report example containing the three core financial statements.

Forecasting

Explore forecasting in business. Learn the definition of forecasting and understand its different types. Discover the importance of forecasting with examples.

International Accounting

Learn about international accounting and how it is governed. Explore the meaning of International Accounting Standards and the international accountant role.

Inventory Accounting

Understand inventory sales and journal entries for cash sales and credit sales. Learn how to keep inventory accounting records and calculate sale amounts.

Managerial Accounting

Learn about managerial accounting. Understand what managerial accounting is, read a definition of managerial accounting, and identify its limitations.

Public Accounting

Learn what public accounting is. Examine a public accounting definition, explore the role of public accountants, and learn about public vs. private accounting.

Strategic Planning

Learn about the strategic planning process in business, what it is and what it is not. Discover examples of goals, strategies, and tactics in a strategic plan.

Types of Accounting

Learn about the fields of accounting. Understand what accounting is, identify the areas or branches of accounting, and examine the types of accountants.

US Accounting Standards

Explore the Generally Accepted Accounting Principles. Learn the definition of GAAP in accounting and discover its history. Understand the ten basic GAAP rules.

Accounting Education Resources

There are many resources for accounting students of all levels and interests. Study.com has thousands of these resources, from accessible, self-paced videos exploring introductory accounting terms to credit-earning, college-level courses. There are also resources for students interested in different accounting fields, such as financial or managerial accounting. Browse our offerings and explore our course syllabi and lesson plans for teachers, tutoring for students, and introductory courses for high schoolers.

Accounting Courses

Study.com's collection of accounting courses encompasses many topics for students interested in the science of bookkeeping. From introductory classes to exam preparation resources, we have choices for learners at every phase of their educational journey. Our courses can help college students move towards their degrees, professionals advance their licenses, and teachers plan their lessons.

Accounting 101: Financial Accounting

This course provides students with a comprehensive introduction to accounting vocabulary, concepts, and best practices. Students will learn the purpose of accounting, basic accounting principles, pertinent technology, and professional ethics.
Accounting 102: Intro to Managerial Accounting

This course teaches students managerial accounting basics, defining accounting strategies and duties. Students will learn to evaluate income and cash flow statements, run cost and profit analyses, and interpret financial data to make business decisions.
Accounting 302: Advanced Accounting

This course provides a deep dive into accounting principles. Upon completion of this course, students will be able to utilize the accounting equation, evaluate financial documentation, and understand how businesses make financial forecasts.
Accounting 303: Cost Accounting

This course covers cost accounting methods and how they are used in real-life business situations. This course teaches students to differentiate between various costing techniques, implement cost accounting formulas, and evaluate accounting trends.
Basics of Accounting

In this professional development course, employees will learn about the principles and purposes of accounting. Employees will learn key terms and phrases, the difference between accounting and bookkeeping, and learn an accounting department's responsibilities.

Accounting Test Prep for Teachers and Students

Accounting Test Prep

Study.com offers a variety of test-prep materials to assist those planning to take accounting exams. Students hoping to earn college credit may want to use the CLEP Financial Accounting Course to study financial statements, internal controls, merchandising, and liabilities. They can also use the DSST Business Mathematics study guide to review math used in business settings. More advanced learners can benefit from Study.com's study guides for tests such as the Certified Management Accounting exam or the Special Enrollment Examination, which focuses on tax accounting. Regardless of the test being taken, test-takers will have a solid preparation for what will be covered on the exam after using these materials.

Tests

Frequently Asked Questions

  • What are the four types of accounting?

    There are many types of accounting. The four most common types of accounting are financial accounting, managerial accounting, government accounting, and tax accounting.

  • What are the basics of accounting?

    Three basic accounting concepts are assets, liabilities, and equity. An asset is something with financial value. A liability is a debt or other kind of financial obligation. Equity is the value of something derived from the total assets less the liabilities.

Scholarships for Accounting Students

Studying accounting and other business related topics like finance, marketing, or business management in school can give you the tools you need to succeed in your career, whether you're looking to quickly rise in the ranks of an existing company or strike out on your own. While college is a sound investment, it can be difficult to find the funds necessary to attend the school of your dreams. Between financial aid, grants, and scholarships, there are many options out there to help you fund your education - but the trick of course is finding them. Here are a few guides to help you find the money you need to be prepared to launch a successful career, including some scholarships offered directly from Study.com.

Check out over $50,000 of available scholarships from Study.com, with due dates in both May and November.