Definition and Meaning of Accounting :
In the context of the study of the meaning of book-keeping, it is better to know the meaning of Accounting also.
The American Institute of Certified Public Accountants has defined accounting as "the art of recording, classifying and summarising, in a significant manner, and in terms of money, transactions and events which are, in part atleast, of a financial character, and interpreting the results thereof".
According to this definition, accounting is the recording of business transactions in account books, i.e., either in a single journal or in many subsidiary books, classifying the transactions recorded in the journal or the subsidiary books into appropriate heads or accounts in the ledger, summarising the effects of the transactions classified in the ledger on the profit and the financial position of the business (i.e., the preparation and presentation of the financial statements like the profit and loss account and the balance sheet), and the analysis and interpreting of the financial statements for the purpose of drawing conclusions about the profitability and the financial position of the business. In short, accounting is the recording, classifying and summarising of business transactions and interpreting the results thereof.
In the context of the study of the meaning of book-keeping, it is better to know the meaning of Accounting also.
The American Institute of Certified Public Accountants has defined accounting as "the art of recording, classifying and summarising, in a significant manner, and in terms of money, transactions and events which are, in part atleast, of a financial character, and interpreting the results thereof".
According to this definition, accounting is the recording of business transactions in account books, i.e., either in a single journal or in many subsidiary books, classifying the transactions recorded in the journal or the subsidiary books into appropriate heads or accounts in the ledger, summarising the effects of the transactions classified in the ledger on the profit and the financial position of the business (i.e., the preparation and presentation of the financial statements like the profit and loss account and the balance sheet), and the analysis and interpreting of the financial statements for the purpose of drawing conclusions about the profitability and the financial position of the business. In short, accounting is the recording, classifying and summarising of business transactions and interpreting the results thereof.
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