Accounting as a Language of Business - 6003 Words

1. Define accounting? Answer to the Question no. 1 Definition of Accounting: â€Å"Accounting is an information system that identifies, records and communicates the economic events of an organization to interested users.† —Kieso, Weygandt, Kimmel-Accounting Principles. â€Å"Accounting refers to the process of identifying, measuring, and communicating economic information to permit informed judgments and decisions by users of the information.† —The American Accounting Association. â€Å"Accountancy may be defined as the collection, compilation and systematic recording of business transactions of money, the preparation of financial reports, the analysis and interpretation of these reports and the use†¦show more content†¦The users include the following: âž ¢ Short-term creditors âž ¢ Long-term creditors âž ¢ Present investors âž ¢ Potential investors âž ¢ Employees’ groups âž ¢ Management âž ¢ General public âž ¢ Tax authorities 6. Assist Management: Accounting assists management in planning and controlling business activities and in taking decisions. For example, projected cash flow statement facilitates management to know future receipts and payments and to take decision regarding anticipated surplus or shortage of funds. 7. Facilitates a Comparative Study: 1. Accounting facilitates a comparative study in the following four ways: a) Comparison of actual figures with standard or budgeted figures for the same period and for the same firm. b) Comparison of actual figures of a period with those of another period for the same firm, i.e., intra-firm comparison. c) Comparison of actual figures of a firm with those of another standard firm belonging to the same industry, i.e., inter-firm comparison. d) Comparison of actual figures of a firm with those of industry to which the firm belongs, i.e., pattern comparison. 8. Facilitates Control over Assets: Accounting facilitates control over assets by providing informationShow MoreRelatedAccounting Is The Language Of Business1286 Words   |  6 PagesAccounting is a major that teaches the language of business, it opens doors to the business world all over the globe, the possibilities with a accounting major is endless in the business field. Whether you want to run your own business or become a certified public accountant majoring in accounting gives you the establishment. A major plus in having a career in business is the flexibility it offers. Many businessmen can make their own hours and handle their business at the comfort of their own homeRead MoreAccounting : The Language Of Business913 Words   |  4 Pagesto Gaspar (2014), accounting can be viewed as â€Å"the language of business† as it records, summarizes and reports the financial activities and events of a business. 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