Accounting is the language of business, it is about recording and communicating financial information to managers and other stakeholders.
Accounting at its basic level can be divided into to main categories
(1) Financial accounting (2) Management accounting.
Financial accounting consist of income statement and balance sheet . The Income statement (profit and loss account) states if a business a business has made a profit or loss and Balance Sheet, this states the assets and liabilities of the business in monetary terms.
Management accounting uses the information from financial accounting to plan and forecast for the future so that the business can be profitable
The government of most countries require the accounts of business organisations to be submitted to relevant tax authorities (HMRC) in the UK and Companies House which keeps the records of registered companies, directors and other information relevant to the businesses