Art, technique or science? That is the debate around the 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 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 hypothesis and theory building that allow to anticipate and detail 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 (takes control of the expenses they make to the state), the Social (management of public affairs and the obligations that individuals and the state have to each other and to the environment in which they live) and Business (Analyze the business 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 customers, investors and suppliers) and which is officially regulated, and the 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: interpret 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 serves to:
* Analyze and report on economic resources of an entity;
* Allow administrators a correct planning and direction of the commercial transactions;
* Control and keep a record of the managements of the administrators and the tax burdens of the entity;
* Help predict money flows;
* Collaborate with the needed information when compiling a national statistic on economic activities.