Define the term accounting explain the function and principles of accounting
Answers
Definition: Accounting is a process, which systematically and comprehensively records business events and transactions, and translate it into the financial information of the business entity to assist the stakeholders in the decision-making process.
In this process, the transactions are identified, recorded, arranged, summarized, simplified properly and then communicated to the interested parties.
Generally Accepted Accounting Principles (GAAP) provide the rules for the preparation of the accounting statements, in the form of concepts, conventions, assumptions and principles. It not only removes confusion but also provide consistency and uniformity in the process. These are the fundamental assumptions, on which the entire system of accounting is based.