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classifying and summarizing in a considerable manner and in terms of money, business transactions, activities and events, which are part of a financial character and later on interpreting the results of the reports. Another definition of accounting is (3) the process of identifying, measuring and communication economic information to allow knowledgeable judgments and decisions by all users of the information.

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The world of accounting follows certain guidelines and procedures that compose of acceptable accounting practice at a given time. These set of guidelines and procedures are known as GAAP which means generally accepted accounting principles. The basics of accounting principles are as follows.

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