Acounting Basic

In: Business and Management

Submitted By alamin94
Words 2265
Pages 10
MEANING OF ACCOUNTING:
Accounting is famously known as the "language of business". Through the financial statements, the end-product reports in accounting, it delivers information to different users.
Accounting is a means through which information about a business entity is communicated.

Accounting Definition:
Technical definitions of accounting have been published by different accounting bodies. The American Institute of Certified Public Accountants (AICPA) defines accounting as:
"the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least of financial character, and interpreting the results thereof."

To further understand what accounting is, we must take a look at the different definitions.
Accounting as a Science: Accounting is the process of identifying, measuring, and communicating economic information to permit informed judgment and decisions by users of information.
Accounting as an Art: Accounting is the art of recording (journalizing), classifying (posting to the ledger), summarizing in a significant manner and in terms of money, transactions and events which are, in part, at least of a financial character, and interpreting the results thereof to interested users.
Accounting as an Information System: Accounting is a service activity, which functions to provide quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions.

The first definition emphasizes the following:
Identifying - in accounting, this is the process of recognition or non-recognition of business activities as accountable events. Stated differently, this is the process which determines if an event has accounting relevance.
Measuring - in accounting, this is the process of assigning monetary amounts to the…...

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