Sunday, June 14, 2009

what is accounting ?

many people think accounting is a service activity or descriptive\analytic discipline or information system , but accounting is all three.
As a service activity accounting provides interested parties with quantitative financial information that helps them to make decisions about deployment and use of resources in business and nonbusiness entities and in the economy.
AS a descriptive\analytic discipline it identifies the great mass of events and transaction that characterize economic activity and, through measurement, classification, and summarization, reduces those data to relatively few,highly significant, and interrelated items that, when properly assembled and reported, describe the financial condition and results of operation of specific economic entity.
As an information system it collects and communicates economic information about a business enterprise or other entity to aside variety of persons whose decisions and actions are related to the activity.
Each of these three descriptions of accounting-different as they may seem-contains the three essential characteristics of accounting.
(1)Identification, measurement,and communication of financial information about
(2)Economic entities to
(3) Interested persons.
these characteristics have been peculiar to accounting for hundreds of years. Yet, in the last fifty years economic entities have increased so greatly in size and complexity, and the interested persons have increased so greatly in number and diversity, that the responsibility placed on accounting profession is greater today than ever before.

1 comment:

Fkrny said...

thanks for this information