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A Brief Description of Simple Business Accounting

Accounting is not a modern day phenomenon. It evolved over a period of thousand of years and was used and in many cases was modified by various accounting professionals in different civilizations. In the beginning it was only meant to keep a tack on the herds and crops as that formed the kernel around which the life of the people in those times revolved. In due course of time as the human activities became more and more complex, the accounting also evolved and started taking a more complex form.

Simple business accounting can be described as the way to communicate the details of the financial activity pertaining to the business activity to the people who need the information to take decisions as well as plan the future action of their businesses. Simple business accounting can be described, in another form, as the financial language used to communicate the day to day financial activities.

To get into further details, it can be defined as the use of mathematical tools and principles to determine the exact reasons as well as the causes behind the results that a business venture is producing. Simple business accounting can be categorized in to three main divisions that are bookkeeping, auditing, and accounting.

As per the definitions of the AICPA, the science of accounting can be defined as the art of recording, classifying, and making a summary of the events that have some financial bearing. It could be in the form of money, any transaction that has a financial implication. The simple business accounting has the important role that all such information has to be presented and interpreted to the management in the most lucid manner.

In the modern business parlance the term simple business accounting is defined as the “language of business”. It is the language that arms the concerned people with the financial information regarding the business entity or any other organization of any other tenor.      

The General Categories that are included in the Simple Business Accounting are the:

  1. Management accounting
  2. Financial accounting
  3. Tax accounting