What the Hell is ACCOUNTING?

Hi there,

If you were being in this hole, I would be guessing that you are trying to find answers to the question:

"What is accounting?", aren't you?

So congratulate, you are being at the right place!

So "What is accounting?"...

In the nutshell,

Accounting is mean how we do the number.

This concept is very easy to remember and understand. And I know when I am talking to you here, lots of people might want to ask:

What do you mean by the word "Do"?

Don't worry, I will explain it right away. Ok. So,

"Do the number " is in here that means an accountant or you can suppose that is a company has to identify, record, and communicate the number as well as the economics events.

And, we will together find out:

What is the identification, recording, and communication?

Firstly, "What is the identification?"...

The accounting activities consist of 3 phases that are:

Identification, recording, and communication.

So identification is the first phase of accounting activities. We can understand shortly that:

The identification of accounting activities is how an organization/accountant Identifies the economic events.

As a result,

You can question that how we can define which one is the economic events and which one is not?

So,

The Economics events include all the events like the purchase of materials, sale of goods, acquisition of machinery, etc. which are measured in monetary terms.

For example The sale of bachelor party services by the IHA company, why the bachelor party services is an economic event because that is a sale of the IHA company to a particular person, and it is measured by monetary terms that mean that a person has to pay for that services.

Secondly, "What is recording?"...

The next phase of accounting activities is recording, which can describe:

The recording is how an organization records the history of its financial activities as well as business events systematically, and chronologically.

For example: After we define the sale of bachelor party services by the IHA company which is an economic event, then we will record, classify, and summarize the invoices and receipts in a journal entry.

When I am talking to you here, you gonna ask me:

What is the journal entry?

Basically,

The journal entry is the process of holding or registering certain economic or non-economic transactions of an organization.

However, In this article I am not able to deep dive into the journal entry, so stay tuned to the next one. Ok!

Finally, "What is communication?"...

The final phase of accounting activities is communication.

Communication is how an organization prepares accounting reports and financial reports, those have been called financial statements.

It helps organizations manipulate, analyze, and interpret for investors as well as customers.

For example: After doing the recording, we will have a list that had been keeping all the history of the sale of bachelor party services by IHA company in a particular span of time. We can collect those statistics to prepare financial statements.

You guys can ask me:

What is the financial statement?

Basically,

Financial statements are published documents that reflect the company's corporate practices and financial reports.

And again I will deep dive into the financial statement in another article.

THE END!

For further information, you can what my youtube video about "What the Hell is ACCOUNTING?"

Bye! Oh almost forget, like, and share this article if you think it is useful.