Most common accounting definition is “Accounting is the language of the business. Language is a way to communicate ideas or information, so in this way accounting is considered a way or path in business studies in order to communicate different aspects of business financial matters. For instance, a manager says that his/her organization gain profit, so all respondents are easily understand that his organization get some thing in the form of money/value. In this example the word profit is a term of business language.
According to American Institute of Certified Public Accountants (AICPA), “Accounting is an 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 results thereof…”
Accounting Principles Board (APB) defined Accounting in the following words, “Accounting is a services activity. Its function is to provide quantitative information primarily financial in nature, about economic entities that is intended to be useful in making economic decisions in making reasoned choices among alternative courses of action…”
American Accounting Association 1966 (AAA) defines, “Accounting as the process of identifying, measuring, and communicating economic information to permit informed judgment and decisions by the use of information…”
In other context, it is systematic process of recording, classifying and summarizing economic event in terms of money in order to facilitate economic decision makers. So in this point of view this subject is a sequence of different steps in order to produce information which facilitate in the way of business decisions.
>> Read Accounting Basics MCQs.
Sehgal, A., & Sehgal, D. (n.d.). Advanced Accountancy (Vol. I & II). New Delhi: Taxmann Publication Pvt. Ltd.
Shukla, M. C., Grewal, T. S., & Gupta, S. C. (2008). Advanced Accountancy (Vol. I & II). New Delhi: S Chand & Co.
Shukla, M. C., Grewal, T. S., & Gupta, S. C. (2008). Corporate Accounting. New Delhi: S. Chand and Co.