Accounting is the practice or discipline based on accounting knowledge and that focuses on faithful knowledge of the company in order to operate and make the best possible decision-making.
Accounting is considered a discipline that seeks to measure, record and interpret the capital of a private or public organization.
Through the use of accounting, individuals and companies have the ability to measure and analyze the behavior of their capital. For this reason, it is possible to distinguish between two modes or forms of accounting: public and private.
Depending on the specific field in which the accounting tools are focused or stimulated, it is possible to transfer their action to important economic sciences or methodologies such as auditing, accounting and tax management, or the financial and administrative management of a company.
In this sense, the methods related to this field, and focused on the knowledge of existing capital, allow to carry out better focused decision-making based on the most faithful image possible of a company or an asset.
Main objectives set by the accounting office
The existence of accounting in both a public and private company is based on a series of goals to be achieved:
- Know with accuracy and fidelity the assets of a corporation, its accumulation of capital and resources, as well as its true financial and accounting image.
- In addition to carrying out a faithful analysis, it should serve as a protection measure against external threats or the malpractice of your management or administrators.
- It must substantially influence decision-making and the design of the company's business plan. In the public sphere we would talk about the configuration of an appropriate economic policy.
Distinction between bookkeeping and accounting
Although it is true that throughout economic theory the concepts of accounting and accounting are usually understood as synonyms, it is possible to distinguish between the two areas certain points of distinction.
Both economic tools are based on the collection and analysis of economic data on a certain company, in order to know its economic or financial health and act accordingly.
That said, by definition accounting is a more fluid phenomenon and adaptable to other branches of the economy as mentioned above, as it applies to different fields of business day-to-day.
While accounting focuses on the analysis and display of results, accounting uses them to implement future methodologies based on them.