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Accounting is a service activit y. Its function is to provid e quantitative information, primarily financial in nature, about economic entities that is intended to be usefu l in making economic decisions, in making reasoned choices among alternative courses of action Accounting is also defined as the process of identifying, measuring and communicatingeconomic information to permit informed judgment and decision by users of the information. Recording Recording is a basic phase of accounting that is also known as bookkeeping. In this phase, all financial transactions are recorded in a systematical and chronological manner in the appropriate books or databases. Accounting recorders are the documents and books involved in preparing financial statements. Accounting recorders include records of assets, liabilities, ledgers, journals and other supporting documents such as invoices and checks. Classifying

The classifying phase of accounting involves sorting and grouping similar items under the designated name, category or account. This phase uses systematic analysis of recorded data in which all transactions are grouped in one place. For example, "travel expenses" might be a category that accountants use to classify expenses relating to company travel. The term "ledger" refers to the book in which classifications are recorded. Sponsored Links Rig & Well Scheduling Manage drilling, completions, workovers, service & testing www.peloton.com Summarizing

The summarizing phase of accounting involves summarizing the data after each accounting period, such as a month, quarter or year. The data must be presented in a manner which is easy to understand and use by both external and internal users of the accounting statements. Graphs and other visual elements are often used to complement the text data. Interpreting

The interpreting phase of the accounting process in concerned with analyzing financial data, and is a critical tool for decisionmaking. This final function interprets the recorded data in a manner which allows end-users to make meaningful judgments regarding the financial conditions of a business or personal account, as well as the profitability of business operations. This data is then used to prepare future plans and frame policies to execute financial plans. Sponsored Links Finance Project Mgmt FirmPMI.org/Business-Solutions Search for Financial Project Mgmt Consulting Firms. Try Our Free Tool

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