accounting

Accounting is the practice of accurately and timely recording , analyzing, summarizing, and classifying financial transactions of a business . Commonly, those financial transactions are recorded in a set of financial records called financial statements .

Accountants or Certified Public Accountants usually handle the accounting procedures of a business or person . In most cases, accounting procedures adhere to generally accepted accounting principles (GAAP) when preparing financial statements. In some countries, accounting procedures may use International Financial Reporting Standards (IFRS) .

Among others, the following are some categories of accounting practices:

Financial Accounting: This is the most common type of accounting. It refers to the process of generating interim and annual financial statements.
Managerial Accounting: Although this category uses the same information as financial accounting, such information is used to make business decisions, such as budgeting and forecasting .
Cost Accounting: Mainly focused on analyzing the costs related to the production of a product by a business to establish its selling price.

The case Free Enterprise Fund v. Public Co. Accounting Oversight Bd. , 130 S.Ct. 3138 (2010) offers a detailed example of accounting in a legal context.