| 0;Accounting is the art of recording, classifying | | | | accounts.” |
| and summarizing in the significant manner and in | | | | An examination of the various elements of the |
| terms of money, transaction and events which | | | | definition shows the role of accounting although |
| are in the part at least of a financial character and | | | | many of its implements may become clear as the |
| interpreting the result thereof.” | | | | course advances. |
| As per the definition accounting and bookkeeping | | | | 1) There are curtains users of accounts. Earlier it |
| is the simple art of record keeping. Every good | | | | was viewed that accounting is for the owner of |
| record keeping system including classification | | | | the business but change social relationship diluted |
| transaction and event as well as their | | | | the earlier thanking. It is now believed that users |
| summarization for ready reference. Essentially the | | | | of accounts includes, employee, ledgers, suppliers |
| transaction and event are to be measured in the | | | | and other trade creditors, customers, |
| terms of money. Measurement in the terms of | | | | government and other agencies and the public at |
| money means measuring at the ruling currency of | | | | large. |
| county like rupees in India, Dollar in U.S.A | | | | 2) The users need data for judgment and |
| The transaction and events must have at least in | | | | decisions. |
| part financial characteristics. The inauguration of | | | | 3) Accounting is a process of identifying users |
| new branches of a bank is an event without | | | | information requirement as also generating, |
| having financial character, while the business | | | | recording and communicating such information to |
| disposed of by the branch is an event having | | | | users. It also a common measurement unit e.g.: |
| financial character. Accounting and Bookkeeping | | | | money. Accounting provides the art of presenting |
| also interprets the recorded classified and | | | | information systematically to the users of |
| summarized transaction and events. | | | | accounts. |
| However the above mention definition does not | | | | Information is useless and meaningless unless it is |
| reflect the present day accounting function. The | | | | relevant and material to a user’s decision. |
| dimension of accounting and bookkeeping is much | | | | The information should be free of any biases. The |
| broader then that described in the above | | | | users should understand mot only the financial |
| definition. A widely accepted definition is | | | | results depicted by accounting figures but also |
| accounting is given by the American Accounting | | | | should be able to access its reliability and compare |
| Association in 1966 which treated accounting as | | | | it which information about attractive opportunity |
| “The process of identifying, measuring and | | | | and the past experience. Accounting data is more |
| communicating economic information to permit | | | | useful if it stresses economic substance rather |
| informed judgments and decision by users as | | | | than technical form. |