Accounting, also known as bookkeeping or accountancy (the practice of accounting), is the process of recording transactions within a business. Before the modern era, many businesses used cash-basis accounting, which simply records when money is spent. Today most countries use the double-entry method, which was invented in Italy during the renaissance. In the double entry method, all transactions (not just cash transactions) are recorded, and every transaction has 2 entries: a credit and a debit. Practicing accountants are expected to conform to a set of guidelines known as Generally Accepted Accounting Practices, or GAAP.
The information generated by accounting is used for many purposes. One is in financial management, where a business can be analyzed using various ratios of its accounting numbers. A company's books are also used to determine tax liability.
In the United States, publicly traded corporations are required to provide financial data to the public. This data must be independently verified, or attested to, by a special class of accountants known as Certified Public Accountants, or CPA. Worldwide, there are classes of certification, such as a Chartered Accountant in the UK.
- Luca Pacioli biography. University of St Andrews, Scotland (2 September 2013). Retrieved on 12 October 2013.