Introduction to Accounting

What is an Accounting?

Accounting is an art of recording, classifying, summarising and reporting of business transaction with an object of showing financial health of company. In other sense, accounting has been referred to as ‘’the language of business’’.

It is summarising phase of an accounting system.

It is basis for business language.

Person responsible for accounting are called accountants.

It requires special skill and knowledge.

Personal judgement of the accountant is essentials.

Financial statement is prepared from accounting records.

It gives the complete picture of the financial condition of the business unit.

Legal formalities can be compiled with the help of accounting.

It provides information for taking managerial decisions.

It has several branches e.g, financial accounting, cost accounting, management accoutring

Accounting is the analysis and interpretation of book-keeping records. It is summarising phase of an accounting system.