Art, technique or science? That is the debate around accounting, although the dilemma, in reality, has no answer. Despite the fact that it is considered a science since it provides true knowledge (which can be systematized and verified and is fallible), and not assumptions, this does not seem enough to take this nomination for granted, and the most accurate thing would be to say that it is not It is neither a science nor an art, but rather a way of recording the economic or financial activities of a legal entity. In a word, accounting is a tool that we have to manage the expenses and income of our company.
Accounting comes to life through the formulation of hypotheses and the construction of theories that allow anticipating and detailing the phenomena of its object of study. On the other hand, it is considered a technique since, based on its procedures, data can be processed and applied.
Accounting, therefore, can be considered as a science or a technique that has the objective of providing useful information for making decisions related to the economy. It is dedicated to analyzing the heritage and translates its results into the so-called accounting or financial statements, which summarize economic situations.
To fully understand accounting, it is necessary to establish three types of it: Public Accounting (keeps control of the expenses they make to the state), Social (management of public affairs and the obligations that individuals and the state have to each other and with the environment in which they live) and Business (Analyzes the commercial relationships of an individual or a company).
The scientific study of accounting had its origin in 1494, when Luca Pacioli (known as Fray Luca de Borgo Sancti Sepulchri) published his work “Summa de Arithmetica, Geometría, Proportioni e Proportionalita”. The object of study of accounting (equity), is usually represented graphically in the form of a T: in a column on the left is included what is owed (Debit), while on the right is the Credit or Credit.
There are two main types of accounting: financial or external, which provides information on the financial status of a company to interested economic agents (such as clients, investors and suppliers) and which is officially regulated, and management accounting or internal, which is used to calculate costs and economic movements within a company.
If we look in the theoretical accounting books we can understand that the fundamental objectives of it are twofold: interpreting the past to make decisions that affect the future in a positive way and record all economic and financial operations. If we try to break down these ambiguous reasons, we can say that accounting is used to:
* Analyze and report on the economic resources of an entity;
* Allow administrators a correct planning and direction of commercial transactions ;
* Control and keep a record of the management of the administrators and the tax burdens of the entity;
* Help predict money flows ;
* Collaborate with the necessary information when making a national statistics on economic activities.