Definition: Accounting refers to the process by which a company records transactions, prepares financial statements, and accounts for expenses, income, losses, gains and other items. It also involves ensuring that all employees are aware of their responsibilities and how they contribute to the overall financial success of the business. The definition of "accounting" is broad but includes aspects such as: 1. Recording transactions: This includes the tracking of payments, receipts, expenses, changes in inventory or accounts receivable balances. 2. Preparation of financial statements: This involves creating and presenting a detailed summary of the company's financial position and performance over a given period. 3. Preparation of income statements: The preparation of a statement that shows how a company has earned profits from its operations. 4. Preparation of loss and gain statements: These show the amount of money paid or received on investments, sales, or other items and how it is allocated among different groups or employees. 5. Reporting of financial information to stakeholders: This includes providing all relevant financial data to external parties such as investors, creditors, shareholders, regulators, etc. Accounting requires knowledge of accounting principles, terminology, and the laws and regulations that govern a company's operations. It involves the use of software for recording transactions, preparing financial statements, and presenting it in a clear and understandable format.

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