You might have a primitive question, “ Why do we take care of Accounting? What is the dual entry booking ? Does Accounting work for us?. It is natural so that I would like to post as per this topic.

Textbook tells you several precise definitions of accounting but it is not intuitive. Thus I define it as coloring money flows.

Let me take an example. You buy a piece of cake near your house. Is this food expense or research & development expense?

It depends on who / why you buy it.

If you buy it as a snack, it is food expense. However if you were a patisieer, it is research expense for new products.

Anyway it is an expenditure for a piece of cake but we can color it in different way. This is a greatness of Accounting.