Financial Accounting Introduction

Accounting is a business language which elucidates the various kinds of transactions during the given period of time. Accounting is defined as either recording or recounting the information of the business enterprise, transpired during the specific period in the summarized form.

What is meant by accounting?

Accounting is broadly classified into three different functions

  • Recording
  • Classifying and Transactions of Financial Nature
  • Summarizing

Is accounting an equivalent function to book keeping ?

No, accounting is broader in scope than the book keeping.,the earlier cannot be equated to the later. Accounting is a combination of various functions viz

American Institute of Certified Public Accountants Association defines the term accounting as follows "Accounting is the process of recording, classifying, summarizing in a significant manner of transactions which are in financial character and finally results are interpreted."

Qualities of Accounting:

  • In accounting, transactions which are non- financial in character can not be recorded.
  • Transactions are recorded either individually or collectively according to their groups.
  • Users should be able to make use of information.
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