Accounting is the process of recording, summarizing, and analyzing financial transactions of a business or organization. It helps in tracking income, expenses, assets, and liabilities, providing a clear picture of financial health. This information is essential for decision-making, budgeting, and ensuring compliance with laws and regulations. There are different branches of accounting, including financial accounting, which focuses on reporting financial information to external stakeholders, and managerial accounting, which provides insights for internal management. Accountants use various tools and techniques to prepare financial statements, such as the balance sheet and income statement, which are crucial for evaluating performance and planning for the future.