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What is Accounting?

Taasha Goldbach Accounting Inglés

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What is Accounting?

An Information System
- Identifies
- Records
- Communicates
Identifying economic events involves
- Selecting economic activities relevant to a particular entity
- Examples of economic events
  - Sale of running shoes & sporting attire @ Nike
  - Payment of wages by Ford Motor Company
  - Collection of ticket sales and payment of expenses by major sporting clubs
Economic events are recorded to
- Provide a history of the entity's financial activities
- And involves
  - Keeping a systematic, chronological diary of events, measured in dollars and cents
  - Economic events are also classified and summarised
Financial information is communicated through
- Accounting Reports
  - Financial Statements or Financial reports
  - Information resulting from similar transactions is accumulated and totalled
Reporting of recorded data is done in a standardised way
A vital element in communicating economic events is the accountant’s ability to analyse and interpret the reported information.
- ANalysis involves
  - Ratios
  - Percentages
  - Graphs
  - Charts
  - To Highlight significant financial trends and relationships
- Interpretation involves explaining
  - Uses
  - meaning
  - limitations
  - Of reported data

Descripción: Notes for defining Accounting, all information is taken from the following book (Carey, 11/2017) Carey, P. (11/2017). Accounting for Decision Making, 4th Edition [VitalSource Bookshelf version].
Creado por: Taasha Goldbach
Visitas: 7
Etiquetas: accounting definition what is accounting?
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