Accounting or accountancy is the measurement, processing, and communication of financial information about economic entities like businesses and corporations. Accounting, that has been referred to as the "language of business", measures the results of organization’s economic activities and conveys this information to a variety of users, including investors, creditors, management, and regulators. Practitioners of accounting are known as accountants. The terms "accounting" and "financial reporting" are often used as synonyms.
Accounting can be divided into many fields including financial accounting, management accounting, external auditing, tax accounting and cost accounting. Accounting information systems are designed to support accounting functions and connected activities.
Accounting is a process that allows recording, processing, interpreting, summarizing, verifying and presenting of the financial transactions.
What is Accounting Study Material?
As per, the American Institute of Certified Public Accountants
"The art of commemorating, sorting out and summing up in a noteworthy manner and in terms of money dealings and events which are, in part at any rate, of a financial disposition and that goes well with understanding the results there from."
Attributes of Accounting
The described definition discloses the following as Properties of Accounting
Events and proceedings of a Financial Nature are
commemorated while the consequences of a non-financial nature are not entered.
Not only this, the record should reproduce the significance of Transactions so registered both independently and cooperatively, which lets in summarization, in that way making it adaptable to investigate.
It can also be seen that the exploiters of the financial statements should be accomplished enough to get hold of the Message comprehended in such financial statements, and it is the comprehension of accountancy which alters the user to appreciate the substances of the financial statements.
Accounting is best acknowledged as the Language of business and passes on the business results. As the consented lingual Franca in addition to being the intermediate of communication, it also lives up to the role of accepting the subsisting as well as impending additions to the presented literature. To exchange a few words the needed, imperative and applicable information, the essentials of the prospective users are acknowledged and a methodical process stood by to resulting in the formation of the “Financial Statements”.
They are first and foremost:
Cash Flow Statements
On the whole, the most important intentions of these statements are
Putting up information which in turns becomes the foundation for practicing decisions and activities by means of the potential users,
§ Contemplating the financial progress and current health of the business
§ Assisting in the policies and procedures formulation for the smooth and proficient behavior of the business.
§ Modifying the accounting to discharge their obligations and stewardship functions efficiently.
Objectives of Accountancy
It serves to be the means of immortalizing the monetary transactions and upshots.
It is demanded to find out the profits of the company, which is accomplished by groundwork of the Income Statement.
It is demanded to make out the obligations (liabilities) and the resources (assets) of the organization.
Accounting records are commanded to be preserved statutorily by the definite government and regulative bodies.
Accounting records are also demanded by the accounting for taking the financial decisions
By and large investors and certain lenders also have need of the research of the financial statements.