Short answerAccountants record what a business earns, owns and owes, then turn that into statements people can trust and use to make decisions. Tax is one branch. Audit, bookkeeping, and internal finance are others.
Accounting is the scoreboard
I'm an accounting senior at UNCG. Here's the distinction: tax is 1 branch of accounting. The work reaches well beyond filing returns.
Accounting is how a business keeps score. Every sale, bill and paycheck gets recorded. Then it gets organized so someone can answer real questions. Are we making money? Can we pay our bills? Where did the cash go?
The main kinds of work
The same degree leads to very different days.
- Bookkeeping: recording the day-to-day transactions.
- Financial accounting: turning records into statements for owners, lenders and investors.
- Audit: checking that a company's statements are fair and backed by evidence.
- Tax: preparing returns and planning around the rules.
- Managerial accounting: budgets, costs and forecasts for the people running the business.
The three statements
Almost everything ends up in three reports. The income statement shows revenue, expenses and profit over a period. The balance sheet shows what a company owns and owes on one day. The cash flow statement shows where cash actually came from and went.
Profit and cash are not the same thing. A company can show a profit and still run out of cash. Learning to spot that is half the job.
Why this matters for your own money
Your life has the same three statements. Your paycheck and spending are an income statement. What you own and owe is a balance sheet. Your bank account is cash flow.
And a CPA is a state license, not a degree. It takes an exam, education and experience, and the details vary by state. I'm not a CPA. I'm a student who likes this stuff enough to build tools for it.