0The accounting system is used to maintain records for all businesses, whether a multinational corporation or a small business.
To account for something means to keep a record of something in your business by using the accounting system.
An accountant (or bookkeeper) collects documentation and records this information, categorizes it (i.e. organizes the different bits of information under certain categories), and presents it in specific formats.
Accounting information is finally presented in the form of financial statements : the key reports of a business.
Bookkeepers are usually involved more in data collection and entry.
Accountants can fulfill this role too, but more often these days are involved in preparing and presenting financial statements, and fulfilling an advisory or consulting role. Accountants have even become business strategists, intimately involved in guiding the operations of a business.
Okay, so now that you can define accounting and related terms, it's time to learn about the famous, or infamous basic accounting equation, the single most important equation in accounting, the foundation on which everything else rests.
