An accounting system is a structured method used by businesses to record, manage, and report financial transactions. It helps organizations track income, expenses, assets, and liabilities, ensuring accurate financial statements. Common components of an accounting system include ledgers, journals, and software applications like QuickBooks or Xero. These systems can be manual or automated, depending on the size and needs of the business. Automated systems often provide real-time data and analytics, making it easier for managers to make informed decisions. Proper accounting systems are essential for compliance with regulations and for maintaining transparency in financial reporting.