What is Accounting definition:
Accountant must recognize all economic events:
An Accountant must recognize all events past, current and future that will have an effect on the economic activity of an organization.
For example, if there is a pending lawsuit against a company, the Accountant will at least make a note in the financial statements that this liability exists.
If it is known that a lawsuit will result in payment by the company, then a liability will be set up on the company's balance sheet.
Education needed by an Accountant:
The importance of accounting shouldn't be underestimated. Without it, no one would really know what a company's financial health was.
With well structured principles and guidance, the Accountant is able to report the economic conditions of a company through the financial statements.
Management and others can then make good decisions about the company.