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"Accounting is the process of collecting, recording, classifying, summarizing, reporting, and analyzing financial activities. Financial accounting focuses on preparing external financial reports that are used by outsiders such as lenders, suppliers, investors, and government agencies to assess the financial strength of a business. Double-entry bookkeeping is a method of accounting in which each transaction is recorded as two entries so that two accounts or records are changed. An annual report is a yearly document that describes a firm’s financial status and usually discusses the firm’s activities during the past year and its prospects for the future. A balance sheet is a financial statement that summarizes a firm’s financial position at a specific point in time. Auditing is the process of reviewing the records used to prepare financial statements and issuing a formal auditor’s opinion indicating whether the statements have been prepared in accordance with accepted accounting rules."