What is Accounting and Explain the Attributes of Accounting,
Answers
Accounting or accountancy is the measurement, processing, and communication of financial and non financial information about economic entities such as businesses and corporations.
The Attributes of Accounting
Recording : It is concerned with the recording of financial transactions in an orderly manner, soon after their occurrence In the proper books of accounts.
Classifying : It Is concerned with the systematic analysis of the recorded data so as to accumulate the transactions of similar type at one place. This function is performed by maintaining the ledger in which different accounts are opened to which related transactions are posted.
Summarising : It is concerned with the preparation and presentation of the classified data in a manner useful to the users. This function involves the preparation of financial statements such as Income Statement, Balance Sheet, Statement of Changes in Financial Position, Statement of Cash Flow, Statement of Value Added.
Interpreting : Nowadays, the aforesaid three functions are performed by electronic data processing devices and the accountant has to concentrate mainly on the interpretation aspects of accounting. The accountants should interpret the statements in a manner useful to action. The accountant should explain not only what has happened but also (a) why it happened, and (b) what is likely to happen under specified conditions.