The word ‘Accounting’ comes from the Latin word ‘Calculi’ which means to count. But academically, accounting is an information system that identifies, records, and communicates the economic events of an organization to interested users.
Some-well-known tips definition of accounting are as follows:
- Accounting is the language of business.
- Accounting is the service activity.
- Accounting is the information system.
- Accounting is the current economic reality.
- Accounting is the historical records.
- Accounting is the reporting commodity.
- Accounting is the responsive ideology.
- Accounting is the controlling mechanism.
- Accounting is the ethics of fairness and neutrality.
- Accounting is the responsible profession.
Some well-known authorized definition of accounting, are as follows:
- According to FASB, ‘Accounting is the service activity of financial recording and reporting.’
- According to AICPA, ‘Accounting is the art of recording, classifying and summarizing, 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.’
- According to AAA, ‘Accounting is the process of identifying, measuring, and communicating economic information to permit informed judgments and decisions by user of the information.’
- The activities of an accountant,
- Banking documentation,
- The activities of company accountants, etc.
To sum up, accounting is the process of recording and informing economic events to make decisions.