accounting is often called the language of business because it provide information to manager , owners costumer . investors and other decision maker in side and out side an organization it is the process of analyzing, calcifying and interpreting business transaction in financial or monetary terms .
like book- keeping accounting has also been defined by different scholars and institution , for better understanding of the terms some of the note definitions are given below :
American institute of certified public accountants defines account as "the art of recording , classifying and summarizing , in a signification manner and in terms of money transaction and event which are , part at least ,of a financial characters and interpreting the result thereof . American Accounting Association has defined the Accounting in a broad sense ." Accounting is the process of identifying , measuring and communicating economic information to permit informed judgment and decisions by user of the information .In the words of R. N. Anthony ."Accounting system is a means of collecting , summarizing analyzing and reporting in monetary terms the information of the business ."
accounting to bier man and Derwin: "Accounting may be defined as the identifying measuring recording and communicating of financial information ."
Thus it is clear from the above definition that accounting is a science of recording transaction of economic nature in a systematic manner and also an art of analyzing and interpreting them . The various step involved in the accounting process are as follows .
A. Recording of financial transaction .
B. preparation of financial statement such as Income statement , Balance sheet ,statement of changes in financial position ,etc.
C. Analysis and interpretation of financial statement .
D. To communicate the result of analysis to all persons who are to make decisions to formulate future plant .
like book- keeping accounting has also been defined by different scholars and institution , for better understanding of the terms some of the note definitions are given below :
American institute of certified public accountants defines account as "the art of recording , classifying and summarizing , in a signification manner and in terms of money transaction and event which are , part at least ,of a financial characters and interpreting the result thereof . American Accounting Association has defined the Accounting in a broad sense ." Accounting is the process of identifying , measuring and communicating economic information to permit informed judgment and decisions by user of the information .In the words of R. N. Anthony ."Accounting system is a means of collecting , summarizing analyzing and reporting in monetary terms the information of the business ."
accounting to bier man and Derwin: "Accounting may be defined as the identifying measuring recording and communicating of financial information ."
Thus it is clear from the above definition that accounting is a science of recording transaction of economic nature in a systematic manner and also an art of analyzing and interpreting them . The various step involved in the accounting process are as follows .
A. Recording of financial transaction .
B. preparation of financial statement such as Income statement , Balance sheet ,statement of changes in financial position ,etc.
C. Analysis and interpretation of financial statement .
D. To communicate the result of analysis to all persons who are to make decisions to formulate future plant .
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