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Class-XI

Accountancy

Topic – INTRODUCTION TO ACCOUNTING

Accounting

According to American Institute of Certified Public Accountants

“Accounting is the art of recording, classifying and summarising 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 Principles Board (APB) of AICPA(U.S.A)

“Accounting is a service activity. Its function is to provide quantitative

information, primarily financial in nature, about economic entities that is
intended to be useful in making economic decisions.”

In Simple words,

Accounting is the process of Identifying, measuring, recording, classifying,
summarizing, analysing & interpreting and communicating financial information

to the users for judgment and decision-making.

Characteristics of Accounting:

(1) Identifying financial transactions and events
Accounting records only those transactions and events which are of
financial nature.
(2) Measuring the transactions
Accounting measures the transactions and events in terms of money which

are considered as a common unit.
(3) Recording of transactions
Accounting involves recording the financial transactions inappropriate
book of accounts such as Journal or Subsidiary Books.