Definition of Accounting

Definition of Accounting

September 22, 2019 by admin0

“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” – American Institute of Certified Public Accountants (AICPA)

“Accounting refers to the process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information” – American Accounting Association (AAA)

“Accounting is a service activity. Its function is to provide quantitative information, primarily financial in nature, about economic entities, that is intended to be useful in making economic decision.” – Accounting Standards Council (ASC), succeeded by Financial Reporting Standards Council (FRSC)

PACH Notes:

It is an art because accountants apply practical  experience, knowledge  and skills guided by accounting principles and  rules in the efficient preparation of Financial Statements. 

It is a service since accounting profession does not involve selling activities. Instead, it provides professional service.

It is a process as it goes through an accounting cycle to summarize business transactions into organized and understandable Financial Statements.

Leave a Reply

Your email address will not be published. Required fields are marked *

@Philippine Accountancy Guide