Sunday, March 25, 2012

What is accounting?


“Accounting is the art of recording, classifying and summarizing in systematic manner and in terms of money, transactions and events which are, in part at least, of a financial character and interpreting the results thereof.”
(AICPA-FASB Terminology)

Accounting was regarded as “the process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information” by the American Accounting Association (AAA). 

“Accounting is a service activity. It’s function is to provide quantitative information, primarily financial in nature about economic entities that is intended to be useful in making economic decision, in making reasoned choices among alternative courses of action. Accounting includes several branches, for example, financial accounting, managerial accounting and governmental accounting.”
                                             (The Accounting Principles Board (APB) of the AICPA)

Accounting in modern age is also defined as modern language of business, an information system and a service activity.

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