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Exam details
Accounting is the process of recording, summarizing, analyzing, and reporting financial transactions of a business to provide useful information for decision-making. It serves as the language of business, helping stakeholders understand financial health.
The primary branches are financial accounting, which focuses on external reporting; managerial accounting, for internal decision-making; tax accounting, for compliance with tax laws; and auditing, for verifying financial statements.
Primary users include investors, creditors, regulators, management, and employees. They use the information to assess profitability, liquidity, solvency, and operational efficiency.
GAAP stands for Generally Accepted Accounting Principles, a set of standardized guidelines used primarily in the U.S. for preparing financial statements to ensure consistency and comparability.
IFRS stands for International Financial Reporting Standards, a global framework for financial reporting adopted by many countries to promote transparency and comparability in financial statements.