Accounting

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.

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.