Accounting: A Business Language

Accounting: A Business Language

Accounting is a language, a system that communicates information. It is often refered to as the language of business, it is just as important in the operation of government agencies, clubs, colleges, and other kind of organizations.
             Main authors has defined the term "Accounting" in different ways. There is difference in the opinoin among the authors. However several possible definitions are given blow

                        "The act of collecting, processing, analyzing, interpreting,
                                           and projecting financial information"

                         "The system of providing quantified information about an
                                 organization to people who need such information"

Connected With A Monetary Event Or Transaction:

 Accounting must be in relation to a transation and the event or transaction must br measureable in terms of money. e.g. passing an examination, delevering lecture in a meeting, winning a game etc.  These are events no doubt, but since these are not measureable in terms of money, there is no question of there accounting
                               

Transactions Are Processed In Three Differnent stages:

(a) Recordin:

In the first stage the transaction are recorded chronologically in the books of accounts

(b) Classifying:

In the second stage the transactions of the same or simillar nature are classified and recorded seprarately

(c) Summarising:

In the stage all the necessary data and information are summarised on the basis of classified record of transaction and communicated to management and other interested persons.

Book-Keeping:

Book-keeping is the art of recording monetary transactions in the books of accounts in a proper manner. The books of accounts are recorded in such way as well as will enabled us to ascertain the complete and accurate result in the least possible with the minimum labour and cost.

                              "Book-keeping is the recording branch of accounting"