WHAT IS ACCOUNTING │STUDY FUNDAMENTALS OF ABM 1 │TEACHER SISTER

WELCOME TO FUNDAMENTALS OF ACCOUNTANCY, BUSINESS, AND MANAGEMENT 1

WHAT IS ACCOUNTING?

"Accounting is a service activity. Its function is to provide quantitative information, primarily financial in nature, about economic entities that are useful in making economic decisions and reasoned choices among alternative courses of action. Hence, it is coined as the language of the business." – Accounting Standards Council (ASC)

"It is also defined as the systematic art of recording, classifying, summarizing, and interpreting." – Accounting Standards Council (ASC)

• Recording – engaged in putting into records all the business transactions.
• Classifying – engaged in sorting and grouping of all similar and interrelated transactions and is accomplished by posting to the ledger.
• Summarizing – engaged in the preparation of financial statements intended for the users of financial information.
• Interpreting – engaged in analyzing the financial statements and the changes to its financial performance from prior years to other similar businesses.

WHAT IS THE MAIN PURPOSE OF ACCOUNTING?

"The main purpose of Accounting is to provide information that is useful for decision making, to record and analyze necessary business transactions, and to provide useful information for both internal and external stakeholders of the organization."

– Accounting Standards Council (ASC)