Accounting is the act of computing something, usually by dealing with numbers. If you were very good at math in high school, you might think about going into accounting.

You can see the word count within accounting, which is one way to remember that the word has to do with keeping track of numbers — usually in relation to financial transactions. Balancing your checkbook is a form of accounting. Large firms often hire accountants to keep track of their earnings and spending. Accounting can also more generally mean explaining. Someone who decides to wear shorts to the prom is likely going to have some serious accounting to do!

Definitions of accounting

n a system that provides quantitative information about finances

balance of international payments, balance of payments
a system of recording all of a country's economic transactions with the rest of the world over a period of one year
current account
that part of the balance of payments recording a nation's exports and imports of goods and services and transfer payments
Type of:
system, system of rules
a complex of methods or rules governing behavior

n the occupation of maintaining and auditing records and preparing financial reports for a business

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cost accounting
keeping account of the costs of items in production
bookkeeping, clerking
the activity of recording business transactions
inventory accounting
accounting that controls and evaluates inventory
cost accounting
single entry, single-entry bookkeeping
a simple bookkeeping system; transactions are entered in only one account
double entry, double-entry bookkeeping
bookkeeper debits the transaction to one account and credits it to another
FIFO, first in first out
inventory accounting in which the oldest items (those first acquired) are assumed to be the first sold
LIFO, last in first out
inventory accounting in which the most recently acquired items are assumed to be the first sold
Type of:
business, job, line, line of work, occupation
the principal activity in your life that you do to earn money

n a statement of recent transactions and the resulting balance

account, account statement
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capital account
(finance) an account of the net value of a business at a specified date
capital account
(economics) that part of the balance of payments recording a nation's outflow and inflow of financial securities
profit and loss, profit and loss account
an account compiled at the end of an accounting period to show gross and net profit or loss
suspense account
an account used temporarily to carry doubtful receipts and disbursements or discrepancies pending their analysis and permanent classification
expense account, travel and entertainment account
an account to which salespersons or executives can charge travel and entertainment expenses
Type of:
financial statement, statement
a document showing credits and debits

n a bookkeeper's chronological list of related debits and credits of a business; forms part of a ledger of accounts

accounting system, method of accounting
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control account
an account that shows totals of amounts entered in a subsidiary ledger
accounting entry, entry, ledger entry
a written record of a commercial transaction
credit side
account of payments received; usually the right side of a financial statement
debit side
account of payments owed; usually the left side of a financial statement
accrual basis
a method of accounting in which each item is entered as it is earned or incurred regardless of when actual payments are received or made
cash basis
a method of accounting in which each item is entered as payments are received or made
pooling of interest
an accounting method used in the merging of companies; the balance sheets are added together item by item; this method is tax-free
audit, audited account
an inspection of the accounting procedures and records by a trained accountant or CPA
limited review, review
(accounting) a service (less exhaustive than an audit) that provides some assurance to interested parties as to the reliability of financial data
financial audit
an attestation that the client's financial statement is accurate
adjusting entry
an accounting entry made at the end of an accounting period to allocate items between accounting periods
credit, credit entry
an accounting entry acknowledging income or capital items
debit, debit entry
an accounting entry acknowledging sums that are owing
limited audit
an audit of limited scope (limited in time span or confined to particular accounts etc.)
analytical review
an auditing procedure based on ratios among accounts and tries to identify significant changes
Type of:
a book in which names and transactions are listed

n a convincing explanation that reveals basic causes

“he was unable to give a clear accounting for his actions”
Type of:
account, explanation
a statement that makes something comprehensible by describing the relevant structure or operation or circumstances etc.

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