Accounting is an important part of any individual, business or organizations economic foundation. Accounting is defined at its best in defining financial condition and performance, in terms of operation, profitability and sustainability. It provides an easy way to the interested party to understand the business operation just by looking at the accounting reports.
Without accounting, there is no easier way to understand the transactions, financial results of operation and condition of an individual, business or organization. Two important types of accounting for businesses are managerial accounting and cost accounting. Managerial accounting helps management teams make business decisions, while cost accounting helps business owners decide how much a product should cost. Professional accountants follow a set of standards known as the Generally Accepted Accounting Principles (GAAP) when preparing financial statements.