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Answer:
Accounting can be defined as a process of reporting, recording, interpreting and summarizing economic data. To understand accounting efficiently, it is important to understand the aspects of accounting.
Economic Events- It is a consequence of a company has to undergo when the number of monetary transactions is involved. Such as purchasing new machinery, transportation, machine installation on-site, etc.
Identification, Measurement, Recording, and Communication- The accounting system should be outlined in such a way that the right data is identified, measured, recorded and communicated to the right individual and at the right time.
Organization-In refers to the size of activities and level of a business operation.
Interested Users of Information- It is about communicating important financial information to the customers, according to which they will make the correct decision.Accounting can be defined as a process of reporting, recording, interpreting and summarizing economic data. The introduction of accounting helps the decision-makers of a company to make effective choices, by providing information on the financial status of the business. Today, accounting is used by everyone and a good understanding of it is beneficial to all. Accountancy act as a language of finance. To understand accounting efficiently, it is important to understand the aspects of accounting.
Organization-In refers to the size of activities and level of a business operation.
Interested Users of Information- It is about communicating important financial information to the customers, according to which they will make the correct decision.Accounting can be defined as a process of reporting, recording, interpreting and summarizing economic data. The introduction of accounting helps the decision-makers of a company to make effective choices, by providing information on the financial status of the business. Today, accounting is used by everyone and a good understanding of it is beneficial to all. Accountancy act as a language of finance. To understand accounting efficiently, it is important to understand the aspects of accounting.
Economic Events- It is a consequence of a company has to undergo when the number of monetary transactions is involved. Such as purchasing new machinery, transportation, machine installation on-site, etc.
Identification, Measurement, Recording, and Communication- The accounting system should be outlined in such a way that the right data is identified, measured, recorded and communicated to the right individual and at the right time.
Organization-In refers to the size of activities and level of a business operation.
Interested Users of Information- It is about communicating important financial information to the customers, according to which they will make the correct decision.
Explanation:
Accounting is used to maintain a systematic record of all the financial transactions in a book of accounts.
For this, all the transactions are recorded in chronological order in Journal and then posted to principle book i.e. Ledger.
To ascertain profit and loss
Every businessman is keen to know the net results of business operations periodically.
To check whether the business has earned profits or incurred losses, we prepare a “Profit & Loss Account”.
To determine the financial position