A business language used for communicating the financial transactions and the results is known as Accounting. The financial data is collected, analyzed and communicated by Accounting.
The concept of Accounting is very old. The Indian scholars Kautilya (Chanakya) introduced the concept of Accounting in his book Arthashastra. The art of account keeping and the methods of checking the accounts were described in his book. In compliance with the business scenario of the world, the field of accounting has undergone remarkable changes.
Depending on the size, nature, volume and constraints of a particular organization, the financial transactions are recorded by the book-keeper according to certain accounting principles and standards as prescribed by an accountant.
The profit or loss of the business can be determined for a particular date by the process of Accounting. The past performance is analyzed and the future course of action is planned by Accounting.
The American Institute of Certified Public Accountant has defined Financial Accounting as:
“the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events which in part at least of a financial character and interpreting the results thereof.”
The main objectives of accounting are as follows:
Accounting Basics Tutorial
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