Accounting may be defined as follows:
"Accounting is an art of recording, classifying, and summa rizing in a significant manner and in terms of money, transactions. and events which are, in part at least, of a financial character, and interpreting the results thereof." (Accounting Research and Termi nology Bulletin, New York American Institute of Certified Accountants, 1961)
"Accounting is a discipline concerned primarily with conveying financial information to people who would use it to improve the outcome of their decision processes."(Miller P, Searfuss D., Smith K., Intermediate Accounting: Richard D. Irwin Inc., Homewood, Illinois, 1982)
"Accounting is the process used to measure and report to various users relevant financial information regarding the economic activity of an organization or unit." (FASB, Statements of Financial Accounting Concepts No. I, Stanford, Conn., 1978)
"Accounting is a service activity whose purpose is to pro vide quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions."(Generally Accepted Accounting Principles -- A Codifi cation of Accounting Principle Bulletins PICPA, 1977)
Basic Concepts Embodied in the Definitions of Accounting
Accounting is an art-"Art" is defined as "the rules or ideas that a person must know in order to follow a profession or craft."
Accounting as an art, therefore follows certain rules or concepts pe culiar to itself. Accounting as a subject of study may also be considered as a science; but because Accounting does not deal with natural phenomena, (unlike zoology, botany, astronomy, and others.) Accounting is said to be more of an art than a science.
Accounting is a discipline - "Discipline" is defined as a sys tem of rules governing conduct or practice. Accountants, most nota bly the CPAs, are accounting practitioners; as such they are expected to be adept in the field of Accounting. Engineers are practitioners of the discipline of Engineering, while architects are practitioners of the discipline of Architecture.
Accounting is a process - A "process" is a series of actions or operations leading to an end. Accounting is a process as it involves methods and procedures in the recording and interpreting of the fi nancial activities of an enterprise. The end view of Accounting is to furnish information to users for decision making.
Accounting is a service activity whose purpose is to pro vide quantitative information about economic entities - Eco nomic entities are any person or group of persons, either natural or juridical, who have a name, a common purpose, and are transacting with others. The purpose of Accounting is to provide information, mainly financial, about these entities.
This purpose of Accounting of putting across to users of financial information about an enterprise has prodded many accounting authors to call Accounting as the "language of business”.
💚