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 that automate various accounting tasks. These systems can be manual or computerized, with many businesses opting for software like QuickBooks or Sage to streamline their processes. An effective accounting system not only aids in compliance with regulations but also provides valuable insights for decision-making and financial planning.