INTRODUCTION TO ACCOUNTING

DEFINITION OF ACCOUNTING:
accounting means the various technical activities performed by accountants, including financial accounting,bookkeeping and management accounting.

Accounting has been referred to as "the language of business"because of its role in maintaining and processing all relevant financial information that an entity requires for its managing and reporting purposes.

According to American institute of Certified Public Accountants (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".

OBJECTIVES OF ACCOUNTING

• The following are the objective of accounting:
• To record the business transactions in a systematic manner
• To determine the gross profit and net profit by a firm during a specific period 
• To know the financial position of a firm at the close of the financial year by way of preparing the balance sheet
• To facilitate management control 
• To assess the taxable income and the sales tax liability
• To provide requisite information to different parties, i.e.,owners, creditors, employees, management, Government, investors, financial institutions,bank etc.