Accounting generally refers to keeping and preparing financial records for an entity. It is a broad term that can also refer to management, auditing, or taxes.
Accounting Extended Definition
In terms of financial accounting, there are several different kinds:
- Modified cash-basis
The cash-basis method is the simplest form and uses only cash accounts. This method lets you record things like cash, expenses, and income but doesn’t let you track long-term liabilities.
Modified cash-basis lets you record short- and long-term transactions, blending the benefits of cash-basis and accrual accounting.
Accrual accounting is the most complicated method and uses advanced accounts like accounts payable, current assets, and inventory, as well as standard accounts such as cash, equity, and income.
Often businesses handle some accounting tasks independently and trust an outside accountant to handle the bulk of the work.
Last Updated By
Andrew Freiman | Feb 22, 2023