Advertisements
Advertisements
Question
Define accounting
Solution
Accounting is a process of identifying the events of financial nature, recording them in Journal, classifying in their respective ledgers, summarising them in Profit and Loss Account and Balance Sheet and communicating the results to the users of such information, viz. owner/s, government, creditors, investors etc.
According to the American Institute of Certified Accountants, 1941, “Accounting is an art of recording, classifying and summarising in a significant manner and in terms of money transactions and events that are, in part at least, of a financial character and interpreting the results thereof.”
APPEARS IN
RELATED QUESTIONS
State what is end product of financial accounting?
Enumerate main objectives of accounting
Who are the users of accounting information?
State the nature of accounting information required by long-term lenders
Who are the external users of information?
Enumerate informational needs of management
