Accountancy

Accountancy is the process of communicating financial information about a business entity to users such as shareholders and managers. The communication is generally in the form of financial statements that show in money terms the economic resources under the control of management; the art lies in selecting the information that is relevant to the user and is reliable. The principles of accountancy are applied to business entities in three divisions of practical art, named accounting, bookkeeping, and auditing.

The American Institute of Certified Public Accountants (AICPA) defines accountancy as "the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character, and interpreting the results thereof

The basic accounting equation is assets = liabilities + equities. This is the balance sheet. The foundation for the balance sheet begins with the income statement, which is revenues - expenses = net income or net loss. This is followed by the retained earnings statement, which is beginning retained earnings + net income - dividends = ending retained earnings or beginning retained earnings + net loss - dividends = ending retained earnings. The current ratio is current assets divided by current liabilities. The debt to total assets ratio is total assets divided by total liabilities.

-          Accounting process in terms of activities
accounting process involves a wide range of activities, such as data collection, identification, measurement, recording, summarizing, and reporting. Every step in accounting, will affect the next step.

-          accounting process in terms of use

accounting process will produce a ready to use the information. Information is expected to assist in decision making, and can be used as a means of accountability