Basis of Accounting

May 12th, 2015
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The process of recording financial transactions as well as reporting on the financial status of a business. 2. The department in a company that handles these tasks.

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AccountingThe systematic recording, reporting, and analysis of financial transactions of a business. The person in charge of accounting is known as an accountant, and this individual is typically required to follow a set of rules and regulations, such as the Generally Accepted Accounting Principles. Accounting allows a company to analyze the financial performance of the business, and look at statistics such as net profit.accounting. 1. The process of recording financial transactions as well as reporting on the financial status of a business. 2. The department in a company that handles these tasks.Barron's Accounting Dictionary: Basis of Accountingof recognizing revenues and expenses. Under the accrual basis of accounting, revenues are recognized as goods are sold and services are rendered regardless of the time when cash is received. Expenses are recognized in the period when the related revenue is recognized and the difference is the net income figure for a particular period. Under the cash basis of accounting, revenues are recognized only when money is received and expenses are recognized only when money is paid. Cash basis financial statements, however, distort financial position and operating results of an organization. A financial statement (or financial report) is a formal record of the financial activities of a business, person, or other entity. In British English-including United Kingdom company law-a financial statement is often referred to as an account, al

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