Concept of accounting
It is actually focused on the documenting, classifying, summarizing, analyzing and interpretation of the transactions.
Accounting stands out as the recording of financial transactions either in a single journal or in several subsidiary books, classifying the transactions into suitable heads of ledger, summarizing the data in the profit or loss account and balance sheet, and the analysis and interpretation of the fiscal reports for the purpose of illustrating summary in regards to the financial situation of the business.
It is in some cases stated that, “Accounting happens where book-keeping ends”.
Definition
According to American institute of Certified Public Accountants, “Accounting is the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events, which are in part at least, of a financial character and interpreting the result thereof”.
According to American Accounting Association, “Accounting is the process of identifying, measuring and communicating economic information to permit informed in a judgements andd decisions by users of the information.”
