WHAT IS ACCOUNTING?

I asked AI and got a decent text book answer:

Accounting is the process of recording, organizing, and analyzing financial transactions using the fundamental equation:

Assets = Liabilities + Equity

This equation ensures that a company’s financial records stay balanced. It tracks what a business owns (assets), what it owes (liabilities), and the owner’s stake (equity). In simple terms, accounting helps businesses understand where their money comes from, where it goes, and how much they really have.

Now, here's my simple human answer:

Accounting is based on a mathematical formula called "the accounting equation."

Assets = Liabilities + Owner's Equity

It works like any other math equation: what you do to one side, you must do to the other to keep everything balanced. This ensures that every financial transaction is properly recorded.

When used correctly, the accounting equation forms the foundation for financial reporting, helping businesses generate accurate financial statements.

Related topics:

-The accounting equation

-Bookkeeping versus accounting

-Certified Public Accountant (CPA)

-GAAP