Accounting

What Does Accounting Mean?
To provide a record such as funds paid or received for a person or business. Accounting summarizes and submits this information in reports and statements.

The reports are intended both for the firm itself and for outside parties. 

Explains Accounting
Accounting helps management make accurate decisions.

Accounting Policies

What Does Accounting Policies Mean?
The specific policies and procedures used by a company to prepare its financial statements. These include any methods, measurement systems and procedures for presenting disclosures. Accounting policies differ from accounting principles in that the principles are the rules and the policies are a company's way of adhering to the rules.

Explains Accounting Policies
Accounting principles are lenient at times, so the policies of a company can be very important. Looking into a specific company's accounting policies can signal whether management is conservative or aggressive when reporting earnings. This should be taken into account by investors when reviewing earnings reports. Also, outside accountants that are hired to review a company's financial statements should check the company's policies to ensure they conform to accounting principles.

Accounting Valuation

What Does Accounting Valuation Mean?
The process of valuing a company’s assets for financial-reporting purposes. Several accounting-valuation methods are used while preparing financial statements in order to value assets. Many valuation methods are stipulated by accounting rules, such as the need to use an accepted options model to value the options that a company grants to employees. Other assets are valued simply by the price paid, such as real estate.

Explains Accounting Valuation
Accounting valuation is important, because the value of assets on a company’s financial statements needs to be reliable. Analysis of this valuation is just as important as the valuation itself. Some assets, such as real estate, which is carried at cost less depreciation, can be carried on the balance sheet at far from their true value.